EMI—HMRC annual return

The following Share Incentives practice note provides comprehensive and up to date legal information covering:

  • EMI—HMRC annual return
  • The EMI annual return form
  • Pre-registration and timing of completion of the annual return
  • Reportable events
  • Adjustment of options
  • Replacement of options
  • Options released, lapsed or cancelled
  • Non-taxable exercise of options (section 5)
  • Taxable exercise of options
  • Nil returns
  • More...

EMI—HMRC annual return

EMI Review: In the Spring Budget 2020, the government announced that it will review the enterprise management incentives (EMI) scheme (see News Analysis: Spring Budget 2020—Tax analysis). On 3 March 2021, the government published a call for evidence regarding a possible expansion of EMI schemes. This seeks views on the current EMI scheme to assess the effectiveness of its targeting and whether more companies should be able to access the scheme to recruit and retain the key talent they may need to grow and scale up. For further information, see Enterprise Management Incentives: call for evidence.

This Practice Note details the following:

  1. the EMI annual return form

  2. the pre-registration and timing of completion of the annual return

  3. reportable events

  4. nil returns

  5. unapproved options

  6. penalties for non-compliance

  7. employee's self-assessment obligation, and

  8. obtaining further information

The EMI annual return form

Any company whose shares are the subject of EMI options at any time during a tax year is required to submit an annual return in respect of the EMI options to HMRC. The EMI legislation requires that such annual returns should be completed for each tax year falling (wholly or partly) in the company's qualifying option period, being the period:

  1. beginning when the first qualifying option to which the company's shares are subject is granted, and

  2. ending when the company's shares are no longer subject to qualifying

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