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May 7, 2021

Hello, is it EMI you're looking for? - EMI and ERS Return Deadline (6 July)

If you are an employer and you operate either an Enterprise Management Incentives (EMI) scheme or an Employment Related Securities (ERS) scheme, you will need to file an EMI or ERS return by 6 July after the tax year end. For the tax year ended 5 April 2021, the deadline is 6 July 2021.

Furthermore, there may be cases where an ERS return is required but no official scheme is in place, such as where an employee or director has acquired shares in a company by reason of their employment (subject to certain exceptions), or the company has been restructured and employees/directors have received new shares.

Enterprise Management Incentives (EMIs)

EMI is a form of employee share option scheme that allows selected employees to be rewarded with tax advantaged share options, i.e. the option to acquire shares at a later date. Where an EMI scheme is in place and there are outstanding qualifying options, the employer company must file a return each year to report any activity in the scheme, e.g. exercises or lapsing of shares. Even where there has been no activity, a nil return is still required to be submitted by the deadline.

Employment Related Securities (ERS)

ERS refers to any shares or securities that are acquired by reason of employment. The most common forms of employment related securities are share options and share awards, however all shares and securities acquired in connection with an employment come within the scope of the ERS regime.

Where there is an ERS scheme in place, then an ERS return will be required by 6 July following the end of the tax year for each year that the scheme is in place. As above, even where there is no reportable activity on the scheme, a return will still be required.

Where there is no formal scheme in place, but employees/directors in the company have acquired new shares during a tax year, an ERS return may be required. There are exceptions to the filing requirement for transfers of shares in the normal course of domestic, family or personal relationships.

Filing the Return

The return is filed through the HMRC Government Gateway, though you will need to notify HMRC of the scheme before a return can be filed.

Filing the return will require specific details about the employees and the shares involved, and specialist advice is advisable where you have not previously filed a return

What Next?

Where you have employees/directors of a company that have acquired new shares in the tax year, and you are uncertain of whether a return is required, please contact a member of the team for a no obligation discussion.

A Slice of the Action: Company Share Schemes (Part 1)

A Slice of the Action: Company Share Schemes (Part 2)


Contact us today to discuss your tax requirements.
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