If your company has granted EMI options, two recurring compliance obligations flow from that: registering the scheme with HMRC, then filing an annual Employment Related Securities (ERS) return every year by 6 July, including years in which nothing happened. EMI grant notifications now run on the same deadline. Missing any of these triggers penalties. This walkthrough covers every step so your team knows exactly what to do and when.
What you must file and by when
Employment-related-securities schemes must be registered with HMRC, and an annual ERS return (including a nil return where nothing happened during the year) must be filed by 6 July following the tax-year end. EMI grant notifications now run on the same 6 July deadline. The obligation runs for the entire life of the scheme, not just the years in which options were granted or exercised.
| Obligation | Trigger | Deadline | Nil return required? |
|---|---|---|---|
| Register the scheme | Before first filing; one-off | Before the first return is due | N/A |
| Annual ERS return | Scheme exists at any point in the tax year | 6 July following the tax-year end | Yes |
| Nil return | No events in the year but scheme still active | 6 July following the tax-year end | Yes, the nil return IS the return |
| EMI grant notification | Options granted during the tax year | 6 July following the tax-year end | N/A (no grants, nothing to notify) |
Step 1: register the scheme (one-off)
Before you can file any return, the EMI scheme must be registered through HMRC's ERS Online Service. Registration is a one-off task completed when the scheme is established. Once registered, HMRC issues a scheme reference number. You will need that number for every subsequent filing.
If you have been operating an EMI scheme without registering it, that is a compliance gap to address immediately. Registration is a prerequisite; you cannot retrospectively file returns without a registered scheme reference.
Step 2: the annual ERS return
Every tax year in which the EMI scheme is in existence (regardless of whether anything happened), the company must file an annual ERS return through the ERS Online Service. The return captures all scheme events during the year: grants, exercises, lapses, and any adjustments to the scheme terms. For grant events, the return requires the agreed Actual Market Value (AMV) and Unrestricted Market Value (UMV) of the shares at the time of grant. See the companion guide on EMI option valuation for how AMV and UMV are agreed with HMRC Shares and Assets Valuation.
The return must be filed by 6 July following the end of the tax year. The UK tax year runs from 6 April to 5 April; so the 2025/26 return is due by 6 July 2026, the 2026/27 return by 6 July 2027, and so on.
Step 3: the nil-return trap
A nil return is required even if absolutely nothing happened during the year. No grants, no exercises, no lapses, no adjustments. If the scheme exists, a return is due. Forgetting the nil return is the single most common EMI compliance error and it carries the same penalty exposure as any other missed return.
Filing a nil return takes a few minutes. Skipping it because "we did not do anything this year" does not. The 6 July deadline applies equally to nil years.
Step 4: EMI grant notifications
When options are granted during the tax year, those grants must be notified to HMRC as part of the annual ERS filing by the same 6 July deadline. Grant notifications are not a separate form submitted at the point of grant; they run through the ERS Online Service alongside the annual return.
The grant notification requires the details that should have been documented at the point of grant: the number of options, the exercise price, the agreed AMV and UMV, and the participant's employment details. If valuations were not agreed with HMRC Shares and Assets Valuation before or at grant, that is a prior compliance issue to resolve; see the EMI option valuation guide and the disqualifying events guide for what can go wrong after the fact. Do not publish or use a direct VAL231 form link; the standalone URL has returned a 404; cite the ERS and EMI manual pages instead.
Step 5: late filing and penalties
Filing after 6 July triggers financial penalties under HMRC's ERS penalty regime. The penalty scale is set out in the HMRC ERS guidance; the figures are not reproduced here because they are subject to change and the current scale should be checked at that source. What is fixed is the principle: late is penalised, including late nil returns, and the company is responsible for filing on time without needing a reminder from HMRC.
If a return has been missed in a prior year, the right course is to file it late and then address the penalty position. Do not leave prior years unfiled.
What you need before you file
Gathering the right information before logging into ERS Online makes the filing straightforward. The checklist below covers an active year with grant events; for a nil year, only the scheme reference is strictly required.
| Item | Why it is needed | Source |
|---|---|---|
| Scheme reference number | Required to access the scheme on ERS Online | HMRC registration confirmation |
| Details of all grants in the year | Grant notification requires option count, exercise price, grant date and participant details | Internal option agreements / cap table |
| Agreed AMV and UMV at grant | The return requires the values agreed with HMRC SAV at the time of grant | HMRC SAV agreement |
| Details of all exercises in the year | Exercises are reportable events even if they qualify for EMI CGT treatment | Internal exercise records |
| Details of lapses and adjustments | Lapses reduce the company's unexercised pool; adjustments change scheme terms | Internal option register |
| Participant employment details | National Insurance numbers and employment status required for each option holder | HR / payroll records |
Review the disqualifying events guide before filing if any participant's employment situation changed during the year. A working-time breach, a change of role, or a corporate event can disqualify options; that affects what you report and may have tax consequences that predate the filing.
Getting it filed
The procedure itself runs through HMRC's ERS Online Service. Log in with your Government Gateway credentials, locate the registered scheme, and complete the annual return for the relevant tax year. The system will prompt for event data, validate basic entries, and issue a submission reference on completion. Download that reference; it is your evidence of on-time filing.
For companies that want the filing handled for them, or that are setting up an EMI scheme for the first time and want the registration, valuation agreement and first-year return managed in one engagement, the EMI scheme setup service and the ongoing core compliance service cover this. The 6 July deadline does not move; the risk of a missed nil return or an incorrectly reported grant event is real. For funded startups with multiple grant tranches across a year, specialist handling is worth the overhead.
See the EMI scheme guide for the full picture of how EMI works, the qualifying-company tests, and how it compares with alternative structures. See the funded startups hub for how share scheme compliance fits into the broader post-funding administration picture.