The government plans to remove the separate EMI option-grant notification for options granted on or after 6 April 2027. Instead, companies will report grant details through the existing Employment Related Securities end-of-year return, beginning with the return for the 2027/28 tax year, which can be submitted from 6 April 2028.
The change is due to be introduced through the Finance Bill 2026–27, so companies should continue monitoring HMRC guidance before relying on the new process. Options granted before 6 April 2027 will remain subject to the existing notification rules.
What is changing?
Under the current system, a company operating an Enterprise Management Incentives scheme may have two reporting obligations:
- submitting a separate notification when EMI options are granted; and
- filing an annual EMI return through HMRC’s ERS service.
For options granted on or after 6 April 2024 but before 6 April 2027, the separate notification must be submitted by 6 July following the end of the tax year in which the options were granted. This is also the deadline for the annual ERS return.
From 6 April 2027, the separate notification is expected to disappear for new grants. Companies will instead include the required grant information in their annual return. A company establishing a new EMI scheme will still need to register it and make the required declaration that the relevant conditions are met before filing its return. HMRC explains the transition in its employment related securities bulletin.
| EMI option grant date | Expected reporting requirement |
|---|---|
| Before 6 April 2027 | Submit a separate EMI grant notification by 6 July following the tax year of grant and file the annual ERS return |
| On or after 6 April 2027 | Report the grant through the EMI annual return, beginning with the 2027/28 return submitted from 6 April 2028 |
What is not changing?
The annual ERS return remains in place, with a deadline of 6 July following the end of the relevant tax year. A return or nil return is required for every scheme registered on HMRC’s ERS service until it has been formally ceased.
Need Help With Your Accounts Or Tax?
Whether you need support with self assessment, VAT returns, payroll, bookkeeping, CIS, company accounts or corporation tax, Asmat & Co Accountants can provide clear, practical advice for your business or personal finances.
HMRC automatically charges an initial £100 penalty when a required annual return is late. A further £300 can be charged after three months and another £300 after six months. Daily penalties of £10 may also apply once the return is nine months late.
Companies should keep copies of uploaded files, online entries and confirmation pages. HMRC’s service does not allow you to retrieve a copy of a submitted notification or return afterwards. Strong bookkeeping should therefore include option agreements, board approvals, valuations, cap-table records and HMRC confirmations.
Wider EMI limits changed in April 2026
For most qualifying companies, options granted from 6 April 2026 benefit from expanded EMI limits:
- the total company option limit increased from £3 million to £6 million;
- the gross-assets ceiling increased from £30 million to £120 million;
- the employee limit increased from fewer than 250 to fewer than 500; and
- the maximum exercise period increased from 10 years to 15 years.
The longer exercise period can also apply to qualifying existing options that have not expired or been exercised, provided any amendment is made in accordance with the legislation and option agreement. Different limits may continue to apply to certain Northern Ireland companies.
From 6 April 2027, employers using the increased thresholds are expected to declare their eligibility through the online reporting process. Businesses that previously exceeded the old limits may therefore wish to revisit EMI with their advisers and limited company accountants.
A practical example
A Reading software company grants options to four employees in May 2027. Under the planned rules, it will not submit a separate notification in July 2028. Instead, it will report the grants in its EMI annual return for 2027/28.
That does not remove the need to establish the market value, confirm eligibility and prepare valid option agreements when the options are granted. Current management accounts and an accurate option register can help prevent missing information when the annual filing date arrives.
Frequently asked questions
Do options granted before April 2027 still need notifying?
Yes. Options granted before 6 April 2027 remain subject to the separate notification requirement and must generally be reported by 6 July following the end of the tax year of grant.
Can a sole trader use EMI?
No. EMI options involve shares in a qualifying company, so they are unavailable to an unincorporated business. Our sole trader accounting service can explain the relevant alternatives. Businesses considering incorporation can also review our guide to setting up a limited company.
Get your share-scheme paperwork in order
Whether you work with our accountants in Slough or accountants in Reading, we can help you maintain option records and coordinate filings with your other Companies House and HMRC deadlines, payroll services and VAT returns.
Need Help With Your Accounts Or Tax?
Whether you need support with self assessment, VAT returns, payroll, bookkeeping, CIS, company accounts or corporation tax, Asmat & Co Accountants can provide clear, practical advice for your business or personal finances.
