HMRC Shares & Assets Valuation (“SAV”) have announced that from 31 March 2016, they are withdrawing the long-standing, but informal, procedures for securing agreement under both PAYE ‘healthcheck’ and ‘post-transaction valuation check’ (“PTVC”) arrangements.

SAV have stated that, in accordance with HMRC’s Promote, Prevent, Respond Compliance Strategy, they will be:

• Providing further help to customers, to sustain and improve levels of compliance, by updating guidance in its Manual
• Considering the possibility of running a small number of Valuation Workshops for agents in 2016/17.
• Working with colleagues in Special Employer Compliance, Large Business and the Risk & Intelligence Service, to identify the minority of cases from submitted returns where valuation tax risk exists and where a review of the valuation is appropriate. 

Additionally, SAV will be examining the valuation check service processes relating to Enterprise Management Incentives (EMI), Company Share Option Plans (CSOP), Save As You Earn share option schemes (SAYE), Share Incentive Plans (SIP)and Employee Shareholder (ES) valuations to consider how these services might be improved.

Capital Gains Tax Post Transaction Valuation Checks, which SAV operates in conjunction with the Valuation Office Agency, will continue by way of the existing CG34 process.

This is a significant change and will affect both the approach to agreeing valuations with SAV and the management of tax risk relating to valuation on the acquisition of shares or making of awards under employee share schemes.

Pett, Franklin & Co. LLP are experts in employee share schemes, share plans and executive incentives. To find out how we can help you in relation to the issues raised relating to valuations, call William Franklin on 0121 348 7878 or email William at william.franklin@pettfranklin.com.