Many founders searching for the EMI valuation process reach for the VAL231 form by name. That form was the historic HMRC valuation-request document, but its standalone URL now returns a 404. Platforms still linking to it are sending you to a dead page. This guide explains what the form was, why the link is dead, and exactly how to agree your EMI option valuation with HMRC Shares and Assets Valuation today so the grant holds up to scrutiny.
How an EMI valuation is agreed with HMRC
An EMI option valuation should be agreed with HMRC Shares and Assets Valuation (SAV) before or at grant. That agreement produces two figures, Actual Market Value (AMV) and Unrestricted Market Value (UMV), which between them fix the exercise price and feed the ERS return. Skipping or informally documenting this step is one of the most common reasons an EMI scheme fails HMRC scrutiny years later. The obligation sits with the company, not the employee. Source: gov.uk/tax-employee-share-schemes/enterprise-management-incentives-emis.
What VAL231 was and why the link is dead
VAL231 was the standalone HMRC form founders and their advisers used to submit an EMI option valuation request to Shares and Assets Valuation. At some point the URL for that standalone form stopped resolving and now returns a 404. It has not been replaced by a new standalone URL: the process to agree a valuation now runs through HMRC's live EMI and ERS guidance pages rather than a dedicated download. Do not link the old VAL231 URL. If you have been given a direct VAL231 link by a platform or tool, verify it before using it; as of the date of this post it is not live.
This matters because the substance of what VAL231 asked for has not gone away. You still need SAV to agree the valuation before or at grant. The form name has simply become a search term rather than a live document. The answer to the search is the SAV agreement process itself, which this post walks through. Source: gov.uk/tax-employee-share-schemes/enterprise-management-incentives-emis.
AMV and UMV: the two figures SAV agrees
SAV agrees two distinct values for every EMI grant. AMV (Actual Market Value) reflects the shares as they are at grant, taking restrictions into account, and sets the exercise price at which no income tax arises on exercise. UMV (Unrestricted Market Value) strips out restrictions and is always at least as high as AMV; it feeds ERS reporting. Getting both figures agreed with SAV before or at grant is what the old VAL231 process was designed to achieve, and what the current SAV agreement process still delivers. For a full explanation with a worked example, see the EMI option valuation guide.
The SAV agreement process, step by step
The steps below describe the task-level process for agreeing an EMI valuation with HMRC SAV. Do not use screen-by-screen instructions taken from memory or third-party tools; the SAV interface can change. Work from the live HMRC guidance pages linked throughout this post. Source: gov.uk/tax-employee-share-schemes/enterprise-management-incentives-emis.
- Prepare the company valuation basis and proposed option terms. Gather your most recent accounts or management accounts, the cap table, any third-party offers or funding round data, and a description of the restrictions attaching to the option shares (vesting conditions, leaver provisions, transfer limits). This is the evidence SAV will use to agree AMV and UMV. Source: gov.uk/tax-employee-share-schemes/enterprise-management-incentives-emis.
- Approach HMRC Shares and Assets Valuation to agree the AMV and UMV before or at grant. Submit your valuation basis through the HMRC SAV process. This is what the old VAL231 form initiated; today the route is through the EMI and ERS guidance pages. Do not grant options before the agreement is in place or at minimum before the process is under way with SAV, unless you are prepared to risk the valuation being challenged. Source: gov.uk/tax-employee-share-schemes/enterprise-management-incentives-emis.
- Obtain HMRC's agreement to the valuation. SAV will confirm the agreed AMV and UMV in writing. Keep this confirmation on file: it is your evidence that the exercise price was set correctly and that the income-tax-free treatment on exercise is secured. This is the substantive outcome the old VAL231 form was designed to obtain. Source: gov.uk/tax-employee-share-schemes/enterprise-management-incentives-emis.
- Grant the options at the agreed exercise price. With the SAV agreement in hand, grant EMI options with an exercise price set at or above the agreed AMV. The option agreement should reference the agreed figures. Keep a copy of the SAV agreement with the scheme documentation.
- Register the scheme and notify the grant by 6 July after the tax year end. Register the EMI scheme on the ERS online service and submit the annual return, including the grant notification, by 6 July following the tax year end. Missing this deadline puts the tax-advantaged status of the options at risk. For the full ERS filing walkthrough, see the EMI annual return and ERS walkthrough. Source: gov.uk/guidance/submit-your-employment-related-securities-ers-return.
What the agreed valuation fixes and for how long
The SAV agreement fixes the AMV that will be accepted as the correct exercise price for the grants made under it. Options granted at or above that agreed AMV carry the income-tax-free treatment on exercise that makes EMI valuable. Options granted below it, or granted without any SAV agreement, are at risk of challenge on exercise.
HMRC does not publish a fixed validity period for an agreed EMI valuation. The practical guidance is that if anything material changes after the agreement, such as a new funding round, a third-party acquisition approach, or a significant shift in the company's financial position, seek a fresh SAV agreement before making the next grant. The earlier agreement will not automatically cover later grants if the share value has moved materially. There is no HP that gives a stated number of days, so treat this as a qualitative judgement rather than a fixed calendar rule.
From valuation to notification: the full sequence
Once the valuation is agreed and the options are granted, the compliance sequence moves to registration and annual reporting. The 6 July deadline covers both the grant notification and the annual ERS return, including a nil return in any year where no events occurred. Source: gov.uk/guidance/submit-your-employment-related-securities-ers-return.
| Step | What happens | Source |
|---|---|---|
| 1. Agree valuation with SAV | Submit valuation basis to HMRC Shares and Assets Valuation; receive written confirmation of agreed AMV and UMV before or at grant | gov.uk: EMI valuation |
| 2. Grant options | Issue EMI option agreements with exercise price at or above agreed AMV; file and retain SAV agreement with scheme documents | gov.uk: EMI valuation |
| 3. Register the scheme | Register the EMI scheme on HMRC's ERS online service if not already registered | gov.uk: ERS returns |
| 4. Notify grant by 6 July | Submit the annual ERS return including the grant notification by 6 July following the end of the tax year in which the grant was made; nil returns are also due by 6 July in years with no events | gov.uk: ERS returns |
For the full ERS annual-return filing process, including what to do in a nil-return year, see the EMI annual return and ERS walkthrough.
Getting the valuation agreed
The SAV agreement process is procedurally straightforward once you have the right documentation, but the valuation basis itself, choosing the right restriction discount and defending it to SAV, is where errors are made. A disputed or informally documented valuation is a known source of EMI scheme failures at exercise, often years after the original grant. If you are setting up an EMI scheme or preparing a fresh grant, the EMI scheme setup service covers the full process from qualification check through to SAV agreement and grant documentation. The EMI scheme overview sets out the full qualifying-company and employee criteria if you are earlier in the process. For funded startups, valuation and share-scheme setup is covered under the funded startups service hub.