Companies must file an annual return with HMRC reporting any share or share option activity involving UK employees and directors, and notify HMRC of any new EMI option grants, by 6th July following the end of the tax year. For the 2024/25 tax year recently ended, the deadline is Sunday 6th July 2025.
The annual return and any such grant notifications must be submitted online via the company's Government Gateway portal, following a one-time registration of the share scheme under the 'Employment-Related Securities (ERS)' area.
Annual return filing process
A return must be submitted for each share scheme registered with HMRC. The return templates for the latest tax year can be accessed here, and companies must select the correct return for each of their schemes. Non tax-advantaged share options/awards must be reported on the return template named "Other", and tax-advantaged EMI, CSOP, SAYE or SIP entitlements/events must be reported on the relevant scheme return.
Companies filing for the first time are advised to register their scheme well in advance of the deadline, as it can take several days for the registration to complete before the return can be submitted, and longer if access to PAYE Online Services needs to be obtained first. Only companies will be able to complete the registration step; agents cannot do so with agent access.
Tax-advantaged scheme registrations: CSOPs, SAYE plans and SIPs
When registering a CSOP, SAYE plan or SIP, the registration process requires the company to make a declaration self-certifying that the scheme meets the legislative requirements. This step is essential for the plan to qualify for its tax-advantages. Any company that implemented a new CSOP, SAYE plan or SIP during the tax year must therefore carry out this registration and declaration by 6th July following the end of that tax year to secure the tax advantages for the grants made – and in practice, in time to enable the filing of the annual return for that tax year.
EMI option grant notifications
Grants of EMI options must be duly notified to HMRC in order to be able to qualify for EMI tax advantages. For EMI options granted before 6th April 2024, the grant notification deadline was 92 days from the date of grant. For EMI options granted on and after 6th April 2024, the grant notification deadline is 6th July following the tax year of grant. The grant notification form is separate to the annual return.
HMRC's guidance on how to make this notification, and the submission form, can be found here.
What needs to be reported on the annual return?
- EMI options
The EMI scheme return requires reporting of any exercises, lapses, cancellations, releases, adjustments and replacements of EMI options. (EMI option grants need to be notified to HMRC separately via a grant notification submission as discussed above.)
- Other share options/awards and shares
Grants of share options and conditional share awards (or 'restricted stock units (RSUs)') must be reported where these amount to rights to acquire shares. This includes any replacement (rollover) grants.
Acquisitions of shares (or other securities), including share option exercises, conditional share award or RSU award vestings, restricted share grants, direct share purchases and free share grants, and certain other share/security-related activity (such as the cancellation of options/awards for cash or other consideration, taxable events arising on restricted shares and the receipt of benefits in connection with rights to acquire shares) are also generally required to be reported.
The return for non-tax advantaged schemes (i.e. "Other" schemes) can be accessed here.
The returns for tax-advantaged CSOPs, SAYE plans and SIPs contain bespoke reporting requirements, and these can be accessed here.
- No reportable events
If there are no events to report for the tax year, but an online scheme registration remains open following previous share award activity, the company is required to submit a nil return.
Other information
HMRC's guidance on how to complete and file the returns can be found here.
It's worth noting that the templates are very sensitive to formatting changes and all data must be entered in a particular way. Any errors in formatting will be picked up by HMRC's automatic file checking service upon upload of the completed template, and it will not be possible to submit the return until any formatting errors are corrected. Copies of returns submitted should be saved locally; these cannot be viewed again in the portal once submitted.
Although the issuing entity and, if different, the employer are jointly responsible for making the submission, in practice the entity that registered the return using its Government Gateway log-in will need to carry this out. Companies may need to factor in time to track this log-in down internally. Group entities are permitted to carry out the registration and filing processes.
An automatic penalty will be issued if a return is not duly filed by 6th July, with further penalties arising if the return remains outstanding. Companies will not receive a filing reminder from HMRC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
