Companies must file an annual return with HMRC reporting any share or share option activity involving UK employees and directors. They must also notify HMRC of any new EMI option grants. Both must be done by 6th July following the end of the tax year. For the 2025/26 tax year, the deadline is Monday 6th July 2026.

The annual return and any grant notifications must be submitted online via the company's Government Gateway portal. Before filing for the first time, the company will need to carry out a one-time registration of the share scheme under the 'Employment-Related Securities (ERS)' section of the portal.

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. Companies must select the correct return for each of their schemes. Non-tax advantaged share options and awards must be reported on the return template named "Other". Tax-advantaged EMI, CSOP, SAYE or SIP entitlements and events must be reported on the relevant scheme return.

Companies filing for the first time should register their scheme well in advance of the deadline, as the registration can take several days to complete before the return can be submitted (or longer if PAYE Online Services needs to be accessed first). Only companies can complete the registration step; agents won't be able to with agent access. More information on how to register a scheme is available here.

Tax-advantaged scheme registrations: CSOPs, SAYE plans and SIPs

When registering a CSOP, SAYE plan or SIP, the company must 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 carry out this registration and declaration by 6th July following the end of that tax year to secure the relevant tax advantages — 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 qualify for EMI tax advantages. For EMI options granted on or after 6th April 2024, the grant notification deadline is 6th July following the tax year of grant. The grant notification form is separate from the annual return.

HMRC's guidance on how to make this notification, together with 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 are 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, including any replacement (rollover) grants.

Acquisitions of shares (or other securities), including share option exercises, conditional share award or RSU vestings, restricted share grants, direct share purchases and free share grants, and certain other share/security-related activity (such as the cancellation of options or 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 must submit a nil return.

Changes to net settlement reporting

Changes to the way ERS net settlement should be reported have been introduced this year. When completing the return for non-tax advantaged schemes, employers will no longer need to complete two lines of information to report net settlement. Instead, only one row of information per individual employee is required. This also applies to late end of year (but not corrected) returns for the 2024/25 (or earlier) tax year. For more information on these changes and examples of how this part of the return should be completed, see here.

ERS reporting requirements for short-term business visitors

Companies will no longer be required to report non-tax advantaged ERS data for employees who are short-term business visitors covered by an EP Appendix 4 arrangement, provided no UK income tax and NICs would be due. This applies for all previous and future tax years. The Employment Related Securities Manual (ERSM140030) has been updated to reflect this.

Practical tips for filing

HMRC's guidance on how to complete and file the returns can be found here. The following practical points are worth bearing in mind:

• The templates are very sensitive to formatting changes and all data must be entered in a particular way. Errors will be picked up by HMRC's automatic file checking service upon upload, and it will not be possible to submit the return until any formatting errors are corrected.
• Submitted returns cannot be viewed again in the portal once submitted. Companies should save screenshots of each page, including the submission confirmation page.
• 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. HMRC does not send filing reminders.
• To avoid delays caused by the unavailability of an ERS administrator, companies are advised to have more than one administrator for their Government Gateway account. HMRC's guidance on how to add another administrator can be accessed here.

We can help

If you have any queries about the reporting requirements or would like any help with completing your annual return, please contact Michael Birchall, Eva Leban or Kathy Granby.