EMI Notification Changes UK 2027: New Annual Return Process

The UK government plans to simplify how companies notify HMRC about Enterprise Management Incentive (EMI) option grants. For options granted on or after 6 April 2027, the separate grant notification requirement is intended to be removed. Instead, the grant details will be reported through the existing EMI end-of-year return.

This is an employer administration change, not a new EMI tax relief and not a relaxation of the scheme's eligibility conditions. The existing UK Share Schemes guide remains the broader comparison of SAYE, CSOP and EMI tax treatment; this page focuses on the grant-notification workflow.

What changes for an EMI grant?

Under the current process, an EMI grant requires a separate notification to HMRC within the applicable notification window, in addition to later employment-related securities reporting. The proposed change removes that separate notification requirement for options granted from 6 April 2027 and requires the grant information to be reported through the existing annual return.

The grant date matters. A company should not apply the future process to an option merely because it is reporting the grant after April 2027.

What does not change?

Removing a separate notification does not remove the need to:

• check that the company and employee satisfy the EMI conditions;
• establish that the option terms and exercise price are valid;
• retain the grant agreement, valuation and board approvals;
• monitor exercise, cancellation, transfer and disqualifying events;
• file the annual employment-related securities return; and
• report taxable events correctly when options are exercised or shares are sold.

The policy paper describes a process change. It does not turn an ineligible grant into a qualifying EMI option or replace the employer's evidence file.

What should employers record?

Create one grant register that can feed the annual return. For each option, retain:

1. employee identity and employment status;
2. grant date and number of options;
3. exercise price and valuation evidence;
4. company eligibility and gross-assets/employee checks;
5. option terms, restrictions and expiry date;
6. any HMRC valuation agreement or reference;
7. exercise, cancellation, lapse and disqualifying-event dates; and
8. the annual-return submission and supporting reconciliation.

The register should distinguish grants made before and after 6 April 2027. This avoids accidentally applying the new reporting route to an earlier grant or omitting a legacy notification.

Annual return timing

HMRC says the revised process will require the grant information in the EMI end-of-year return. The policy paper states that the updated return begins with the return for the 2027 to 2028 tax year, submitted from 6 April 2028. Employers should follow the final ERS service instructions and deadline when the reporting window opens.

Do not read “submitted from 6 April 2028” as permission to delay a current grant notification. For grants made before 6 April 2027, the then-current notification rules remain relevant. Keep a calendar keyed to the grant date, not just the year in which the annual return is filed.

The normal ERS annual-return deadline is 6 July following the end of the tax year. On that basis, a 2027/28 return can be submitted from 6 April 2028 and is normally due by 6 July 2028, subject to the final service instructions. The company still needs to submit a return or nil return for registered schemes where HMRC requires one. Save the completed template and submission receipt because the online service may not retain a copy that can be reopened later.

The change therefore creates two dates to control: the legal grant date, which determines whether the separate notification rule applies, and the annual-return deadline, which determines when the consolidated information must be filed. A board approval date, offer date, employee acceptance date and legal grant date may differ. Keep the signed option agreement and use the date on which the option was actually granted under its terms. If an award is approved before 6 April but granted afterwards, escalate the classification rather than choosing the date that gives the easier process.

How the change fits with EMI tax treatment

EMI can provide tax advantages when the company, option and employee meet the statutory conditions. The administrative change does not alter the separate questions of:

An annual-return filing cannot cure a grant that failed the EMI conditions. Conversely, a qualifying grant can still need careful exercise and sale reporting.

Transitional controls for grants around 6 April 2027

Create a cut-off report before the transition. List every grant that is expected to be made in the months before and after 6 April 2027, then reconcile the report to board minutes, option agreements, the cap table, payroll and the share-plan platform. Mark whether the separate notification has been completed, is still required or is expected to be reported only in the new annual return. Keep evidence of any correction or late submission with the grant record.

Do not use the new annual return field as a reason to omit the current notification for an earlier grant. Equally, do not submit a duplicate notification for a post-6 April grant merely because a template or adviser checklist has not been updated. A duplicate or missing record can make the annual return inconsistent with the company's option register. Have one owner responsible for the transition and one reviewer independently compare the return data with the source agreements.

The separate notification change also does not remove the need to register an ERS scheme with HMRC, file the annual return, report nil returns where required or retain evidence for a compliance check. If the company operates EMI alongside CSOP, SAYE or another ERS arrangement, keep separate scheme identifiers and templates. A group-wide share-plan dashboard can be useful, but it should not merge schemes with different reporting rules.

What software should test

The share-plan or payroll system should store the grant date as a date field, not only a tax-year label. It should preserve the number and class of shares, exercise price, restrictions, employee identifier, valuation reference, changes to the option and later events. Test exports for grants made on 5 April and 6 April 2027, options amended after grant, cancelled options, partial exercises, leavers and disqualifying events. The test should show which items feed the annual return and which historic notification evidence is retained separately.

Ask the provider when its 2027/28 template will be available, how it validates the Unique Scheme Reference and whether it stores a copy of the submitted file. A system can reduce transcription risk but cannot decide whether an employee or company qualifies for EMI. The employer remains responsible for the legal facts and should reconcile the system output to signed documents before submission.

Tell employees that the administrative change does not change the option price, vesting conditions, exercise window or tax treatment. If a grant is corrected, cancelled or replaced, explain which agreement controls and keep the communication with the record. Where a return is late or contains an error, contact the ERS team or adviser promptly, preserve the original submission and document the correction rather than silently overwriting the register.

Add the annual-return deadline to the board compliance calendar and assign a backup contact for holidays or adviser changes. This simple control reduces the risk that a grant is accurately recorded but missed in the filing window.

Review the calendar after every Finance Bill update before filing.

For audit purposes, keep the legal grant date separate from the date the board approved the award, the date the employee signed the agreement and the date an online notification was submitted. Those dates can fall in different periods. A short transition memo should explain which date controls the reporting route, identify the source document and record any uncertainty sent to HMRC or an adviser. Do not infer the legal grant date from a payroll upload or a share-plan platform timestamp alone.

Company, adviser and software preparation

Companies with multiple grants should ask their payroll, share-plan and accounting systems which field will feed the annual return. Check whether the software distinguishes grant date, notification date and annual-return year. Test the data for options granted around 6 April 2027, including awards approved before the date but legally granted after it.

Advisers should preserve the valuation and eligibility review even if the notification interface becomes simpler. A shorter online process increases the importance of the underlying grant register, not the opposite.

Practical checklist for the 2026/27 transition

1. List every live EMI grant and its legal grant date.
2. Separate grants before and after 6 April 2027.
3. Complete the current notification process for grants that still fall under current rules.
4. Add post-6 April 2027 grants to the annual-return data model.
5. Retain valuations, agreements, employee eligibility and company eligibility evidence.
6. Reconcile the EMI register to payroll, cap-table and ERS records.
7. Recheck Finance Bill 2026–27 and HMRC ERS guidance before the 2027/28 return.

Frequently Asked Questions

The main implementation task is a clean grant register with a reliable grant-date cut-off. The online notification may become simpler, but EMI eligibility evidence and annual reporting remain essential.

Official sources

• HMRC: EMI removal of the separate grant notification requirement
• GOV.UK: Enterprise Management Incentives
• GOV.UK: Employment-related securities — submit returns
• HMRC: Finance Bill 2026–27 documents