In a welcome change, HMRC have withdrawn their July 2025 guidance that short term business visitors (STBVs) without a UK tax liability need to be reported in an Employment-Related Securities (ERS) return. Please see Employment related-securities bulletin 64 (February 2026 – GOV.UK for a full read.
What changes did HMRC announce?
In July 2025, HMRC originally updated its guidance to state that ERS reporting applied to the Appendix 4 (which relaxes normal PAYE requirements for STBVs) population regardless of the number of workdays in the UK. This potentially brought into scope a significant number of STBVs, as the guidance did not limit the obligation to the individuals with more than 30 days in the UK named in the Appendix 4, meaning that STBVs with no tax liability needed to be included in the annual ERS returns.
The HMRC team responsible for Appendix 4 is not the same team responsible for the ERS returns, therefore the update announced in 2025 was not aligned and created conflicting compliance expectations challenging employers to manage in practice. As a result, this introduced a degree of risk whereby HMRC could apply penalties for “material inaccuracies” in ERS filings, although it’s arguable that omitting awards where no tax is at stake should not be considered a material error.
What has changed?
Addressing this disconnect, the position has now been withdrawn, reflecting a full reversal of HMRC’s previous stance.
HMRC confirmed in ERS Bulletin 64 (February 2026), that for STBVs covered by an Appendix 4 arrangement, there is no requirement for employers to report non-tax advantaged award data in the ERS return where no UK income tax or national insurance contributions are due for all previous and future tax years. The reporting for this population therefore remains the same as it was last year – they can simply be excluded!
The Employment Related Securities Manual (ERSM140030) has now been updated to reflect this revised treatment.
In the exceptional case that a UK tax or social security liability is due for an STBV, such events should be captured in the ERS reporting, e.g. a previously UK tax resident STBV to whom share options were granted whilst resident.
The update significantly reduces administrative effort for internationally mobile populations.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Gemma Ludwig
Partner, Global Equity and Reward
John Pritchard
Senior Manager, Global Equity and Reward
Simply follow our Vialto Alerts page on LinkedIn and posts will be displayed on your feed. To ensure you don’t miss one, once you’re on our LinkedIn page, click on the bell icon under the banner image to manage your notifications.
Further information on Vialto Partners can be found here: www.vialtopartners.com
Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.
© 2026 Vialto Partners. All rights reserved.