EMI share options: have you registered them within the deadline?
EMI share options provide tax benefits to employees through the right to acquire shares at a preferential value, but there are strict rules on notifying HMRC on time.
05 June 2024
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An Enterprise Management Incentive (EMI) share option scheme provides significant tax benefits to employees through the right to acquire shares in the future, but for their market value at the date of grant.
However, as Lia Tse, a member of the tax team in our Bristol office explains, the rules are very strict on the requirement to notify HMRC of the grant of such options.
If an EMI scheme is not notified by the statutory deadline, it will likely result in the advantageous tax benefits being lost.
Scheme registration with HMRC and notification
To simplify the process and bring it more closely aligned to the other HMRC-approved share option schemes, the EMI notification statutory deadline has been extended from 92 days following the date of grant, to 6 July following the end of the tax year in which the option was granted.
The change applies to EMI options granted on or after 6 April 2024.
While the change might ease the time pressure and administrative burden by having the EMI notification and annual Employment Related Securities (ERS) return filing deadlines on the same date, we would recommend registering a new EMI scheme and submitting the notification promptly to avoid a last-minute rush, or any unexpected delays.
It is worth noting that before you can submit an EMI notification via the HMRC online service, it can take up to four weeks to obtain a scheme reference number and for HMRC to update their records following a new scheme registration.
It is therefore necessary to make sure there is sufficient time for this in order to submit the EMI notification on time.
Record of EMI notification
The HMRC online service will not save any of the information submitted as part of the notification and you will not be able to access the information, or a confirmation of receipt, again.
Therefore, we would recommend keeping PDFs of screen prints of all the information submitted, together with the confirmation of receipt, as evidence of correct and on time notification.
Further information
If you would like to discuss a new or existing EMI or other share scheme, please do not hesitate to contact a member of our tax team.
EMI share options
See also our other articles on EMI share option schemes:
- What are the ongoing compliance requirements after granting an EMI option?
- Why should I implement an EMI scheme over a cash bonus?
- What are the advantages of agreeing an EMI valuation?
- The Top 5 reasons why EMI share option schemes go wrong
- Pros and Cons of using Share Scheme Platforms to implement an EMI Scheme
- What is an Employee Ownership Trust and is it right for my business?
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