How to notify HMRC about your EMI scheme

If your company gives UK employees, directors or advisors share options, you’ll need to keep HMRC in the loop via Employee Related Securities (ERS) reporting.

Missing a notification can lead to penalties or loss of tax benefits, so it’s worth getting right.

What is ERS reporting?

ERS reporting is HMRC’s way of tracking any share-based rewards you give to employees or directors. As an employer, you must: 

1. Register your scheme or arrangement on HMRC’s ERS service.
2. Notify certain events (such as EMI option grants) within the statutory deadline.
3. File an annual ERS return for each scheme type by 6 July after the end of the tax year – even if there has been no activity, in which case you file a nil return.
4. Cease a scheme when it ends, to stop having to file nil returns.

Doing this ensures you stay compliant and protects valuable tax advantages for your team.

Why ERS reporting matters

1. It’s the law – HMRC requires all schemes to be registered and reported.
2. Tax benefits depend on it – missing deadlines can cause tax advantages to be lost.
3. Avoid fines – penalties start at £100 per missed deadline and can quickly add up.
4. Keeps everything tidy – reporting keeps your company records accurate for investors, auditors and future fundraising.

ERS reporting deadlines at a glance

EMI option grants

• Granted before 6 April 2024: Notify within 92 days of the grant.
• Granted on or after 6 April 2024: Notify by 6 July following the end of the tax year in which the grant was made. 

Annual ERS returns (all schemes) 

• Due by 6 July each year, for every registered scheme *. 
• Nil returns – Due by 6 July each year, for every registered scheme.
• Closing a scheme – once you’ve submitted your final return (including the final event date), you can cease the scheme via the ERS service.

* The Initial notification for CSOPs is included in the Annual return, in contrast to EMI, where there is an Annual return and a separate Initial return

The ERS reporting process 

Step 1: Register your scheme

Before you can report anything, you must register your scheme on HMRC’s ERS service. Only the company can do this.

You’ll need: 

• The scheme type.
• Your PAYE reference.
• Your Government Gateway login.

More information: 

• How do I register an EMI Scheme with HMRC?
• How do I register a new Growth Share or Unapproved Option Scheme with HMRC?

Step 2: Notify grants and events

EMI notifications

If you grant EMI options, you must notify HMRC by the correct deadline.

• Before 6 April 2024: 92-day rule.
• On/after 6 April 2024: 6 July after the tax year.

You’ll need to submit details such as:

• The date of grant
• Number of shares
• Exercise price
• Market value

Other notifications

While EMI has specific grant notifications, other schemes don’t require one-off grant notifications – but they must be reported in your annual return.

• CSOP
• Unapproved options
• Growth shares
• Conditional growth shares
• SIP
• Share issuances
• SAYE and “Other ERS”

Step 3: Prepare and file your annual return

Every scheme you’ve registered needs an annual return, even if nothing happened during the year.

HMRC provides spreadsheet templates for each scheme type (EMI, CSOP, SIP,  SAYE and Other ERS):

1. Fill in the correct template for your scheme, using the technical notes provided.
2. Use HMRC’s file checking service to validate your spreadsheet before submission.
3. Log in to the ERS service and upload the completed file by 6 July after the tax year. Both employers and authorised agents can do this.
4. If there is no activity, file a nil return by selecting “no” when asked about reportable events.

Note: There is no separate grant notification for CSOP, SIP, SAYE or other arrangements; you simply report any grants, exercises, lapses, or share awards in the annual return.

Your company must submit its annual return electronically. If you are unable to file online for some reason, HMRC requests that you share your reason by post:

Employee Shares & Securities Team
Room G47
100 Parliament Street, London
SW1A 2BQ

If you do not file your return and any information accompanying it electronically, you may face a penalty, unless HMRC has agreed in advance that you may file some other way.

For more information on contacting HMRC about your options, please consult this GOV.UK page.

Step 4: Close schemes when they end

If your scheme has finished or was registered in error, you can stop filing returns by ceasing it in the ERS service. You’ll need to log in, choose the scheme and provide the date of the final event. 

You must still submit an annual return for the year the final event occurred.

Common mistakes to avoid

• Not registering – you can’t notify or file until the scheme is registered.
• Confusing EMI deadlines – remember: 92 days applies only to grants before 6 April 2024; 6 July applies to grants on or after 6 April 2024.
• Forgetting nil returns – file one by 6 July, even if there was no activity.
• Using the wrong template – download the correct scheme template and use HMRC’s file checker to avoid rejections.
• Failing to cease old schemes – close a scheme in the ERS service once all events are reported to avoid unnecessary nil returns.

How Vestd can help

ERS compliance can be fiddly. Never miss a deadline again. The Vestd platform helps with: 

• Completing your annual notifications 
• Keeping your data clean and accurate 
• Keeping track of all option grants
• Tracking lapses and leavers
• Pre-filled spreadsheets to make the process simpler 

Care to see this in practice? 

Speak to one of our equity consultants today.