ESPP tax paid thru payroll - Is Form 11 amendment possible ?

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elcato

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I have paid my ESPP tax thru payroll for 2022 and am registered for Form 11. The taxable amount used by payroll is about €100 higher than the gain (x2) I made after selling, wiring and Foreign Exchange costs. I don't see anywhere obvious on the Form 11 to amend this to allow for the cost of collection/conversion to your bank account in Ireland. Is there somewhere I have missed ? I did ask my payroll section and they stated I would have to amend this myself on ROS but couldn't say where exactly.

Note: I sold shares immediately so not claiming for loss between buy and sell price, just the expenses that go with getting the lolly into your own bank account.
 
Normally the company sells employees the shares at a discounted rate as benefits to the employees. The tax ( USC, PRSI, income tax) is due on the discount on the share price ( market price at delivery - share price you pay). In my case, our company broker provides the benefit statement and exchange rate on the date of share delivery. I file RTSO1 and pay the tax 52% on the discount myself. If you have paid the tax on the discount and you think that the amount is overstated, you just need to correct the amount on your FORM11 in ROS by 30 Nov 2023. You will get refund if you overpaid your taxes. If you don't know the exchange rate, why don't you use Irish central bank exchange rate on the date of share delivery.
 
elcato said:
I have paid my ESPP tax thru payroll for 2022 and am registered for Form 11. The taxable amount used by payroll is about €100 higher than the gain (x2) I made after selling, wiring and Foreign Exchange costs. I don't see anywhere obvious on the Form 11 to amend this to allow for the cost of collection/conversion to your bank account in Ireland. Is there somewhere I have missed ? I did ask my payroll section and they stated I would have to amend this myself on ROS but couldn't say where exactly.

Note: I sold shares immediately so not claiming for loss between buy and sell price, just the expenses that go with getting the lolly into your own bank account.
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Since it was processed through your payroll as pay, you need to talk to your employer if you feel the amount was overstated. There is no way to reduce it via a form 11 as it was a taxable benefit you were taxed on which is included in the pay figure your employer submitted to Revenue. Those costs would not be allowable anyway in computing the taxable gain for income tax purposes. Also unless there something else where you need to be registered as self assessed, there's no need to register for self assessment when your ESPPs scheme is taxed through payroll.
 
Yes, it's already going thru' payroll. I asked our department and they said you would need to claim it back via your tax return or p21 balancing statement. The thing is I just don't know where I fill it in on the form 11. There is a share options category but nothing specific to ESPP and I guess they're not in any hurry if you would be claiming a refund rather than paying up. Add to that the sticky plastering that's been done over the years to allow for the new taxes to be collected via the same Form :(
 
Revenue class ESPP as share options (technically they are options but still a bit lazy by Revenue), so it is the share options field in the Form 11 for self declared ESPP. These days share options are fairly uncommon but ESPPs are common - so the field is probably mostly used for ESPPs.

(Think I'm more or less repeating what "relax carry on" said) If your employer is paying the tax then I assume the extra tax and income will already be included in the amounts they show for tax paid and income. If you fill it in again in the share options field I think that could cause confusion as you will be overstating both your income and your taxes, also they might complain they never received the associated RTSO1 form.

I was told about 15 years ago by an accountant that for ESPP you were supposed to pay tax on the profit before those costs. I think that was partially justified then by the tax being "only" 40% - now it's 52%.

In a self declared ESPP tax, there's nothing to stop someone deciding to declare the amount net of fees, and it does happen. However Revenue get the gross figure from the employer so it's not advisable to put your own figure.

In your case since the employer is paying it for you I think you're goosed.

In a higher fees ESPP scheme with contributions less than maybe 2k per period it'd be worth considering the option to take the money out of the scheme before the close date if it looks the like end price will be lower than the start price. (There typically is an option to cancel and get payments refunded).
 
elcato said:
Yes, it's already going thru' payroll. I asked our department and they said you would need to claim it back via your tax return or p21 balancing statement. The thing is I just don't know where I fill it in on the form 11. There is a share options category but nothing specific to ESPP and I guess they're not in any hurry if you would be claiming a refund rather than paying up. Add to that the sticky plastering that's been done over the years to allow for the new taxes to be collected via the same Form :(
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There is no way for you to amend this as it's part of your payroll. The expenses incurred are not allowable deductions for income tax anyway. If your employer used incorrect figures in taxing you then it's up to them to fix. A form 11 is for a self assessed taxpayer which unless you have income which makes you a chargeable person, you shouldn't be registered for or filing. Your payroll should not be providing you with advice to fix a payroll error via a tax return. That's assuming there's any error at all.
 
Some really interesting posts here - but I have some queries for a friend.

From what I can gather my friend works here for US company.

There were deductions from pay.

Shares were bought on market and given to friend at a reduced price.

(This seems to me to be an ESPP and not a share option).

Employer did not pass the gain through salary and Revenue who got the figures from empolyer are now forcing all the employees to file Form 11 with late filing fees.

Clearly an ESPP with the employer putting the amount of discount through payroll would have saved many (I believe this affects a series of US tech companies operating here) a great deal of anxiety and hassle.

What makes an ESPP ' a share option' in the first place?
 
@elcato I think @relax_carry_on is correct - your disposal is not part of EPSS - your taxable charge for income tax should be (market price - discounted price) x number of shares. You have a capital gain on the other side on the disposal.
 
It's an option because you've the option to buy shares at the lower of the two prices at the start or the end of the period.

The discount is "ok" (considering the tax and charges), the real value in ESPP is that ability to buy at the lower of two prices. AFAIK no broker will sell you an equivalent product. Some ESPPs even used have a facility to choose a lower price from a period longer than 6 months.

I think the ability to pay ESPP through payroll only happened after the Sarbanes-Oxley switch from options to RSUs? RSUs initially were such a mess for tax thanks to Revenue - it had to be handed to payroll.
I'd guess newer ESPP schemes set up after this also then tend go through payroll.
 
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