Stock options and RSUs, UK employer

(My question is about income tax and national insurance regarding stock option exercise and restricted stock unit distribution. It is not about Capital Gains Tax.) In the tax year 2022/2023, I acquired some shares via stock options and restricted stock units that were received as compensation via my employment with a UK employer. The shares were of a company: (a) which was not a UK company, (b) which is listed but not in the UK. Some shares were sold to cover tax. My UK employer processed that via its payroll. Income tax and national insurence contributions were paid by my UK employer and things were reflected in my payslips. Could you advise me, please: 1. Is it correct that I can just count that as UK income for the self-assessment and I don't need to count that for the self-assessment as foreign income? 2. My employer may have made some mistake(s) and I also may want to use different exchange rates (different from what my UK employer used). If I recalculate the income to correct mistake(s) (if any) and if I use different exchange rates, could I just submit my self-assessment with the new figures and with note(s) for HMRC? Obviously, if I do that, my income won't necessarily match what was reported by my UK employer. 3. Is it correct that I am allowed to choose to use monthly HMRC exchange rates (from https://www.gov.uk/government/publications/hmrc-exchange-rates-for-2022-monthly and https://www.gov.uk/government/publications/hmrc-exchange-rates-for-2023-monthly ) even: (a) if some of the exchange rates used by my UK employer were/may have been different, and (b) if the 'actual' exchange rates, e.g., when my employer exchanged/may have exchanged USD for GBP for paying taxes, were/may have been different? (All is to the best of my understanding.) Thanks a lot.

Hi,

As the payment is from your employer, the income should be shown in the employment section if it is included in your P60. You would then claim credit for the Tax in the foreign section under 'Employment, self-employment and other income which you paid foreign tax on'. If it's not included in your P60, please include it on the box on the employment page for 'Tips and other payments not included on your P60'. ERSM20193 advises that when RSUs payout at the market value on what is called "dividend equivalents" in either cash or shares, such payments will generally be taxed as earnings in the year they are received.  

ERSM20193 - Employment-related securities and options: what are securities: RSUs and dividend equivalents 

Thank you.

Thank you. Could you advise me regarding points (2) and (3) in my original message in this thread, please? Following the last message from HMRC Admin 32, could you also advise me, please: 4. If there is no reduction for the UK tax (if any) that I would like to claim for foreign tax (if any), does it mean that I don't need to fill in the foreign section in regard to this (the stock options and RSUs)? 5. I am not sure why ERSM20193 was mentioned as it is related to 'dividend equivalents' for RSUs, as I understand. Was it provided just for general information?

Hi StockOptions821485,

If you know for sure an error has been made, you should ask your employer to resubmit the correct information to HMRC so that your details then match.
Yes you can use any of the rates referred to on your link within the correct tax year.

Thank you.

Hello. Thanks. > If you know for sure an error has been made, you should ask your employer to resubmit the correct information to HMRC so that your details then match. It is not necessarily the case that I know for sure. Could you advise me, please, if it is not successfully arranged with my employer in a near future point, and I need to submit a self-assessment by the deadline (31st of January 2024), can I use my own calculation for such income for the self-assessment? Is it fine that such a calculation would not match the calculation from my employer? Changes may be: (a) correcting mistake(s) if any; (b) using different exchange rate(s); (c) also (in addition to what I originally mentioned for the point (2)) using different valuation(s) or/and similar. Also, could you also help me with my questions (4) and (5) from my previous message in this thread, please?

Hi
As you are not sure an error has been made, you will need to submit the details that the employer has given you until such times it has been confirmed that it is wrong and revised details can then be submitted in order to amend the return.
For points 4 and 5 - As the payment is from your employer, the income should be shown in the employment section if it is included in your P60.
You would then claim credit for the Tax in the foreign section under 'Employment, self-employment and other income which you paid foreign tax on'.
If it's not included in your P60, please include it on the box on the employment page for 'Tips and other payments not included on your P60'. ERSM20193 advises that when RSUs payout at the market value on what is called "dividend equivalents" in either cash or shares, such payments will generally be taxed as earnings in the year they are received.  
Employment-related securities and options: what are securities: RSUs and dividend equivalents

Thank you very much. a. I am sorry, could you advise me, please, if tax events in relation to stock options and RSUs were processed by my UK employer, and if there is no reduction for the UK tax that I would like to claim for foreign tax (if any), does it mean that I don't need to fill in the foreign section in regard to this (the stock options and RSUs)? That is my assumption but I just want to check. b. I am sorry, I assume ERSM20193 was mentioned for general information as I think I did not mention 'dividend equivalents' (or something else that is directly, particularly related) in my original message. If ERSM20193 is directly, particularly related to my original post in this thread, could you let me know, please, as I may have misunderstood?

Hi
As the payment is from your employer, the income should be shown in the employment section if it is included in your P60.
You would then claim credit for the Tax in the foreign section under 'Employment, self-employment and other income which you paid foreign tax on'.
If it's not included in your P60, please include it on the box on the employment page for 'Tips and other payments not included on your P60'. ERSM20193 advises that when RSUs payout at the market value on what is called "dividend equivalents" in either cash or shares, such payments will generally be taxed as earnings in the year they are received. 

Hello. Thanks. I am sorry, it seems the last response does not necessarily directly resolve the point(s) in my previous message. a. You wrote about claiming credit for the tax in the foreign section. I am sorry, could you advise me, please, if the tax events in relation to stock options and RSUs (the related shares were of a company: (a) which was not a UK company, and (b) which is listed but not in the UK) were processed by my UK employer and there is no reduction for the UK tax that I would like to claim for foreign tax (if any), is it correct that I don't need to fill in the foreign section in relation to this (the stock options and RSUs)? b. I am sorry, I am not sure why ERSM20193 was mentioned by HMRC Admin 10 and HMRC Admin 32. I think I did not mention 'dividend equivalents' (or something else that is directly, particularly related) in my original message. Could you advise me, please, was there a specific reason why ERSM20193 was mentioned? Was it mentioned by HMRC Admin 10 and HMRC Admin 32 just for general information? c. Also, you wrote: "If it's not included in your P60, please include it on the box on the employment page for 'Tips and other payments not included on your P60'." I am sorry, whilst it seems that is not relevant to my case, it may be helpful to clarify if anyone else looks at this thread: if it had not been included in my P60, is there a chance that actually it would have to be shown somewhere else, e.g., in the 'Share schemes' box (as per 'HS305 Employment-related shares and securities — further guidance (2022)')? And/or would it have to be in 'Tips and other payments not on your P60'?

Hi,

If your employer has processed the RSU's, even if they are overseas and this is reflected in your P60, you would include this in the employment section of the tax return. Where overseas tax was deducted, you can claim a tax credit for this in the foreign section. By referring to ERSM20193, my colleagues are highlighting the guidance that the payments from RSU's are considered employment income and will be taxed as such. If the RSU's are not included in your P60, you would show the money for the RSU's in the tips and other payments box in the employment section.

Thank you.

Thank you very much. Regarding 'Where overseas tax was deducted, you can claim a tax credit for this in the foreign section.': could you advise me, please, if I don't claim a tax credit for overseas tax (if any), then I don't need to fill in the foreign section in relation to this (the stock options and RSUs), is it correct?

Hi,

Yes, that is correct.

Thank you.