Employment-related securities | Reporting obligations and appointing additional administrators

The deadline for submitting employment-related securities annual returns and enterprise management incentive (EMI) notifications to HMRC for the tax year ending 5 April 2025 is by 6 July 2025.

Companies operating employment-related securities arrangements should diarise this important date (and ensure that any new schemes are registered promptly so that returns and notifications can be made before the deadline). As the deadline falls on a Sunday this year, in practical terms most companies will be looking to file by Friday 4 July.

What are employment-related securities?

Employment-related securities (ERS) arrangements include:

• Tax-advantaged plans: EMI options, Company Share Option Plan, Share Incentive Plan and Save As You Earn (SAYE) Plan.

• Non-tax advantaged ERS arrangements: This is widely drawn and will broadly include any employee or director shares and options, whether acquired under an employee share plan or otherwise.

Carried interest and co-investment entitlements issued to UK-based directors or employees of a fund manager or investment adviser are generally also treated as ERS.

What are the reporting obligations?

If a company operates ERS arrangements, it must submit end of year returns by 6 July using HMRC's Employment Related Securities Service. For companies operating EMI plans, there are additional notification requirements. Companies must:

• register any new ERS schemes established within the 2024/25 tax year by 6 July 2025. This process can take up to 10 days, so allow enough time for registration to meet the annual returns deadline.

• submit ERS annual returns for the 2024/25 tax year by 6 July 2025. This includes making the important declarations of compliance for any tax-advantaged plans.

HMRC's guidance "How employment-related securities work if you're an employer" provides basic information about how to register a scheme and what to report to HMRC.

What about EMI notifications?

If any EMI options have been granted during the 2024/25 tax year, the company must notify HMRC of the grant of the options by 6 July 2025. Failure to notify means that tax relief will not be available, so it is important to ensure that all notifications are correctly submitted by the deadline.

Previously, the notification deadline was within 92 days of the date of grant (for EMI options granted before 6 April 2024). Following recent simplification changes, the EMI notification deadline is now aligned with the ERS annual returns deadline of 6 July – although in-year notifications are still possible and many companies are continuing to submit notifications shortly after grant, rather than waiting until close to the 6 July deadline.

Although the deadline for submitting EMI notifications has been extended (to by 6 July following the end of the tax year the grant was made in), companies should note that the process for notifying HMRC remains the same. EMI notifications must still be submitted to HMRC using notification templates (which are separate to the end of year return forms) – see HMRC's guidance 'Submit an EMI notification'.

What templates do I need to use?

The latest end of year return templates, EMI notification templates and guidance notes are available on HMRC's Employment Related Securities Service.

HMRC offers a check ERS files service, to enable companies to check for formatting errors before submitting their annual returns.

What happens if I miss the deadline?

Late filing will trigger automatic penalties from HMRC (starting at £100 per arrangement) and may have particularly serious consequences for tax-advantaged plans, including loss of valuable tax reliefs.

Most companies will be keen to be able to demonstrate that they have fully complied with their ERS reporting obligations – for example should they be subject to a tax compliance check (including a PAYE audit) or a corporate event involving due diligence on the company's incentive arrangements. We are increasingly seeing HMRC looking at historic ERS compliance in assessing reasonable excuse claims, so good compliance is particularly important.

Appointing additional ERS administrators

HMRC report that many companies fail to meet the ERS filing deadline because they discover that they cannot log in (often because the main administrator is away or has left the company).

HMRC recommend that it is advisable to have more than one administrator for each Government Gateway account. The backup administrator can perform various functions, including submitting ERS returns. For instructions on how to set up a backup administrator, see ERS Bulletin 59.

Points to note

• Companies must submit a return for every live scheme that they have registered on the ERS online service.
• There are separate templates to use for each type of tax-advantaged plan, and the "'other" template should be used for arrangements that are not tax-advantaged.
• Where there have been no reportable events, a "nil return" must be submitted.
• If EMI options have been granted during the 2024/25 tax year, EMI notifications must be submitted by 6 July 2025 (this a separate obligation using HMRC's notification templates, in addition to submitting end-of-year returns for all live EMI schemes).
• Where a scheme is no longer operating (or was registered in error), the company must cease the ERS scheme, providing a final event date and submitting a return for the tax year in which the final event date falls (if relevant, see HMRC's guidance "Tell HMRC your employment related securities scheme has ended").
• It is important to take screenshots or save copies of all the information uploaded to HMRC (as it is not possible to subsequently access a copy of what was submitted).

Please get in touch with your usual Osborne Clarke contact or one of the experts below if you have any queries or would like to discuss further.