Reporting share schemes: HMRC's new procedures - boring but important!

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Many companies are looking for better ways to encourage high-performing personnel to stay with or join the business. One of the most popular and tax-efficient arrangements is the enterprise management incentive (EMI) scheme. EMI schemes have a number of set-up requirements and procedures and this includes the notification of share options granted to directors or employees within 92 days of the date of grant. New reporting procedures apply from 6 April 2014 requiring the notification to be made online.

HM Revenue & Customs (HMRC) have introduced a new online procedure called the Employment Related Securities (ERS) Online Service. The new procedure replaces paper forms required to be submitted by employers issuing shares or share options. This service must be used if the date of grant of options was after 6 April 2014.

Employers and their agents will need to register EMI schemes using the ERS Online Service. The ERS service can be used to complete a notification of a grant of EMI options to 30 or less employees. However, companies notifying a grant of options to more than 30 employees must use and send an attachment that is downloaded from HMRC's website in Open Document format (ODF). This template attachment should be opened using Excel version 2010 (or later) or LibreOffice 3.5 (or later) which is free software.

The annual tax return forms EMI40 and form 42 for share schemes will be issued by HMRC in paper format for the 2013/14 tax year. These paper forms must be filed with HMRC by 6 July 2014. These annual tax returns must be filed online for future tax years.

HMRC are writing to employers with existing EMI schemes under their EMI references.   However, companies with new schemes will need to notify HMRC promptly so that they or their agents can register their schemes online and file notifications and returns by the relevant deadlines. Further details can be found at:

As with all such tax situations, advice should also be sought before proceeding.  For further details call Alan Boby on 01295 250401 or email

Alan Boby

Ellacotts LLP"


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