Carta offers companies that are setting up tax-advantage schemes (e.g. EMI or CSOP plans) a way to stay compliant with all the necessary filings and valuations needed for such schemes.
Administrators can easily keep track of actions they need to take towards their equity grants in the Compliance centre.
The Compliance centre can be accessed on the main dashboard of the company by clicking Manage compliance or navigating to the side menu Compliance centre under Equity compliance.
Your Compliance centre shows you how healthy your company is in terms of legal requirements for your tax advantage schemes. Your compliance status will be displayed in the upper-right hand corner:
- Fully compliant: you have no pending compliance actions.
- Compliance at risk: you have pending compliance actions that need to be completed soon.
- Not compliant: you have missed the deadline of one or more compliance actions.
These are some of the things that you can use the compliance center to keep track of.
- AMV/UMV Valuations
- 409 Valuation
- EMI Notification to the HMRC
- EMI Annual Return to the HMRC
- CSOP Annual Return to the HMRC
- Other ERS Annual Return to the HMRC
- EMI/CSOP limit status
The Compliance overview will visually organize the upcoming events so the company keeps compliant with their tax-advantageous schemes.
The section is divided into:
AMV/UMV Valuations
In order to properly account for the issuance of your employment related equity awards in the platform, all grants must have an AMV and a UMV valuation valid at grant. The Compliance centre will let you know if you have grants missing valuations.
Having grants with proper AMV and UMV valuations will help administrators with HMRC filings as these values are used when reporting equity grants to the HMRC.
You will see a notification on Compliance centre if your action is required.
Click Request or add a new AMV and UMV valuation to record a valuation.
409A Valuation
A 409A valuation is necessary when offering equity awards to US grantholders. You can easily request a 409A valuation through Carta.
You will see a notification on Compliance centre if your action is required.
Click Request or add a new 409A valuation to record a valuation.
EMI Notification to the HMRC
An EMI Notification (EMI1) must be filed with HMRC within 92 days of the date of grant under Schedule 5 Income Tax (Earnings and Pensions) Act 2003. That will ensure that the EMI scheme remains compliant and all its benefits are retained by grantholders.
The Compliance centre will help administrators with a reminder that EMI grants need to be notified to the HMRC whenever they are issued in the platform. It will help pointing how many days there are left for the deadline to end and also for which grants the form needs to be generated.
Click Generate EMI notification filing to generate an EMI Notification & EMI Annual Return.
The Compliance centre will also prompt a reminder for administrators to mark the EMI notification form as Filed when they finish the notification to the HMRC.
EMI Annual Return to the the HMRC
The EMI Annual Return (EMI40) is a compulsory filing that must be delivered to the HMRC on or before 6 July following the end of a tax year. The EMI40 lists all relevant changes regarding your EMI scheme within the tax year and has 5 sheets in total. Carta currently fills in data in 3 of these sheets: RLC, NonTaxable and Taxable; these sheets include all changes (cancellation or exercise data) recorded on the platform.
The Compliance centre will help administrators with a reminder that the EMI Annual Return needs to be generated as per the deadline established by the HMRC.
Click Generate EMI annual return report to generate an EMI Notification & EMI Annual Return.
The Compliance centre will also prompt a reminder for administrators to mark the EMI Annual Return as Filed when they finish the notification to the HMRC.
CSOP Annual Return to the HMRC
Companies must complete an online end-of-year return on or before 6 July for each registered and self-certified Schedule 4 Company Share Option Plan (CSOP) scheme.
The CSOP attachment only needs to be completed if there are outstanding CSOPs or CSOP activities within the tax year.
The Compliance centre will help administrators with a reminder that the CSOP Annual Return needs to be generated as per the deadline established by the HMRC.
Click Generate CSOP annual return report to generate the CSOP Annual Return.
The Compliance centre will also prompt a reminder for administrators to mark the CSOP Annual Return as Filed when they finish the notification to the HMRC.
Other ERS Annual Return to the HMRC
Companies operating employment-related securities (ERS) schemes must submit an ERS Annual Return for all schemes, including one-off awards or gifts of shares. Companies must submit their return by 6 July following the end of the tax year.
The Compliance centre will help administrators with a reminder that the ERS Annual Return needs to be generated as per the deadline established by the HMRC.
Click Generate other ERS annual return report to generate the ERS Annual Return.
The Compliance centre will also prompt a reminder for administrators to mark the ERS Annual Return as Filed when they finish the notification to the HMRC.
EMI/CSOP Limit Status
Companies must observe the individual and aggregated limits for the issuance of EMIs and CSOPs. The Compliance centre will set reminders when issuances approaching or exceeding the limits.
Click Check employee limit status to review the individual and aggregated limits for EMI and CSOP issuances.
Timeline
The timeline shows a list of events in order to maintain your tax-advantageous schemes compliant. The events range from adding valuations to filing notifications to the HMRC. Administrators will also be able to click + Upcoming event offering a more personalized experience that will cater for different companies' necessities.
Events in this timeline can be archived at administrators' discretion. Personalized events can also be edited after being included in the timeline.
EMI/ CSOP limits
The EMI and CSOP limits displays a bar showing the company's outstanding value of EMI issuances towards the total limit allowed by the statutory requirements defined by the HMRC.
Click Manage Limits to see a detailed breakdown of your companies EMI/CSOP Limits by stakeholder.
Filings for the Current Tax Tear
Filings for current tax year is focused on the HMRC filings. The section will cover the EMI Annual Return, CSOP Annual Return and ERS Annual Return. The events will be divided in generating and making the report as filed. A green sign will be displayed if the task has been concluded.
Click View HMRC filings to visit the page in Carta where you will be able to execute such actions.
Valuations
Valuations shows the company's latest valuations, as well as if there are any grants missing valuations.
Click Manage valuations to either request a new valuation or manually add missing valuations to the grants in the system.