How to file an EMI annual return with HMRC

Author:

Lucy Hoyle

|

Read time:

4 minutes

Published date:

November 17, 2023

Learn how to file an EMI annual return. U.K. companies must file an EMI return to HMRC by July 6 to report share-related events from the previous tax year.

Contents

• How to file an EMI annual return with HMRC
• What is an ERS return?
• How to file an EMI annual return
• 1. Prepare your annual return report
• 2. Set up your EMI return via HMRC
• 3. Declare activity or file a ‘nil’ return
• 4. Upload your annual return file
• 5. Add employer company details
• 6. Review and submit your annual return

If your company offers equity to employees in the UK under an employment related securities (ERS) scheme, you need to submit an ERS return to HMRC by 6 July every year. If you fail to meet this deadline or you file an incorrect return, your company may have to pay a penalty and your employees could lose any tax advantages from the scheme.

The Enterprise Management Incentive (EMI) scheme is the UK’s most popular employee share scheme. This article explains the general steps to file an EMI annual return with HMRC, and how using Carta makes the process more efficient.

For other ERS schemes – such as CSOP, SAYE, SIP and schemes without tax advantages – see our article on filing an ERS return with HMRC.

What is an ERS return?

An ERS return is a compulsory annual filing submitted to HMRC by companies that award shares or options (i.e. employment related securities) to their employees.

The purpose of an ERS return is to report any share-related events that took place in the previous tax year (from 6 April to the following 5 April) for each scheme you’ve registered with HMRC. If no action was taken or there are no outstanding qualifying options, you simply need to file a ‘nil’ return.

How to file an EMI annual return

1. Prepare your annual return report

The first step is to prepare your report, detailing all the actions that took place in the previous tax year. You can follow the EMI return template and guidance provided by HMRC, or create your own ERS files using the technical note to ensure they’re formatted correctly. Either way, you’ll need to input your information manually.

Alternatively, if you’re a Carta customer, you can export a EMI annual return report from our platform in just a few clicks. Log in to your account and select ‘HMRC’ from ‘Filings’ in the left-hand navigation bar. Click the ‘Generate Filing’ button and select ‘EMI Annual Return’ from the drop-down menu.

2. Set up your EMI return via HMRC

Sign in to your company’s PAYE account via the HMRC online portal. If you don’t have a Government Gateway user ID and password, you’ll first need to register with HMRC as an employer.

Once you’ve logged in, head to the ‘Employer Related Securities’ section and click ‘View schemes and arrangements/submit returns and notifications’. Select the relevant scheme and click ‘Next’.

On the following page, you’re asked to specify the type of EMI filing. Select ‘End of year returns’ and click ‘Next’.

Note that if you granted any new EMI options in the tax year in question, you’ll need to submit an EMI notification separately to your EMI annual return. To do this, select ‘In year notifications’ and follow the steps outlined in our EMI notification guide.

3. Declare activity or file a ‘nil’ return

At the start of the process, you’ll be asked whether any changes have been made to your EMI options during the relevant tax year, including exercises, cancellations, adjustments and lapses.

Click ‘yes’ to declare any activity, or ‘No (nil return)’ if there’s nothing to report. Hit the ‘Continue’ button to move on.

4. Upload your annual return file

You now need to upload the annual return report you prepared in the first step. Note that the online portal will only accept files in the format of comma-separated values (CSV) or OpenDocument Spreadsheet (ODS).

On this page, select the relevant file type (.ods for Carta-generated reports) and click ‘Continue’.

After you’ve uploaded the attachment, you’ll be promoted to check your report for accuracy. Once you’re ready, click ‘Continue’ to move on to the next section.

5. Add employer company details

This section asks for your company name, address, Registration Number and Corporation Tax reference. You’ll also need to confirm whether the company is registered in the UK or overseas.

After clicking ‘Continue’, you’ll see a message about eligibility criteria for the EMI scheme. If your company has any qualifying subsidiaries, click ‘Yes’ and provide the necessary information. Otherwise, click ‘No’.

After filling in the subsidiary company details, you’ll be able to check and edit the information and add a new subsidiary, if needed. Click ‘Continue’ once you’ve finished.

6. Review and submit your annual return

The final step is to review your return and make any necessary changes to ensure the information you’ve provided is accurate.

Click ‘Accept and submit’ to complete the process. You should then see a message on the screen confirming your submission.

If you’re a Carta customer, remember to mark the EMI annual return as ‘Filed’ in your account so you have a record of the date you submitted it to HMRC.

Author Information

Author: Lucy Hoyle

Lucy Hoyle is a Senior Content Engineer at Carta. She oversees editorial processes, AI search optimization (AEO) strategy, and the use of AI to optimise marketing systems. She previously supported Carta teams in Europe, Asia-Pacific, and the Middle East with localised content and international SEO.