HMRC have screwed me

jamesd

When it comes to the shares, consider what I recently did: exercised options to buy privately held company shares outside any HMRC scheme. The difference between fair market value at the time of option grant and fair market value at the time of exercise is treated as salary and tax and NI must be paid on it by the company just like salary. If the company doesn't do it, I have to do it within 180 days. There's no public market in these shares and I'd have to sell them to one of a fairly limited number of possible buyers if I wanted to sell. That doesn't change the obligation to pay tax but not being publicly traded does probably reduce the value of the shares to account for the limited selling opportunities.

Your position, if outside any scheme, is likely to be that tax and NI is due on the value of the shares at the time they were transferred to you.

karcal

dunstonh wrote: »

You keep saying you were given them. Was it under a profit sharing scheme or other employee benefits scheme? Different taxation rules apply to HMRC approved schemes.

I wasnt told that it would be under and scheme - All i was told was that I would get 5% of the company and Im trying to ush this through now. I didnt have to pay for them, they were gifted to me (at no cost).

jamesd

Then be sure that the company gets good tax advice so it knows how to handle the tax, because if it gets it wrong, you're on the hook. Gifted shares sound like taxable salary with NI and tax due.

sarahlouise210

karcal wrote: »

I wasnt told that it would be under and scheme - All i was told was that I would get 5% of the company and Im trying to ush this through now. I didnt have to pay for them, they were gifted to me (at no cost).

Are you an employee or do you mean that you have been made a director of the company and have been given a 5% share in it (in the form of shares )??? You are far too vague to get good advice
Shares are often given as a way of avoiding paying tax at the higher rate ....

Cook_County

It sounds as if the company failed to operate PAYE correctly when they transferred the shares to you, but unfortunately following the Demibourne case that does not let you off the hook. You had/have an obligation to notify HMRC, file a correct return & pay the tax.

amf

Cook_County wrote: »

It sounds as if the company failed to operate PAYE correctly when they transferred the shares to you, but unfortunately following the Demibourne case that does not let you off the hook. You had/have an obligation to notify HMRC, file a correct return & pay the tax.

If the company failed to operate PAYE then the Special Commissioner's decision in the Demibourne case removes all doubt (if there ever was any in the first place!) that the employer is responsible for making PAYE deductions in accordance with the PAYE regulations.. In the absence of a direction otherwise it will be the employer's responsibility for meeting the duties lost by his failure. Of course, the individual is responsible for the correct completion of the S A Return.

I agree with others that the OP has been too vague on this issue for any definitive answer to be given.