What is the 92-day EMI notification deadline?

The company must notify HMRC of each EMI option grant within 92 days of the grant date. The notification includes the employee's details, the number of shares, the exercise price, the market value, and the grant date. Missing the deadline can result in the loss of EMI tax advantages. The 92-day notification is the most critical EMI compliance requirement. Key points: (1) Deadline — the company must notify HMRC of each EMI option grant within 92 days of the grant date (the date the option is granted, not the date of the board meeting or the date the agreement is signed). (2) Method — the notification is made through HMRC's online Employment-Related Securities (ERS) service. The company registers the EMI scheme online and submits the notification for each grant. (3) Content — the notification includes: (a) The employee's name and National Insurance number. (b) The number of shares under option. (c) The exercise price. (d) The market value of the shares at the grant date. (e) The grant date. (f) Whether HMRC Advance Assurance was obtained (and the reference number). (4) Consequences of late notification — if the 92-day deadline is missed, the options are not qualifying EMI options. This means: (a) Income tax and NIC are due on exercise (on the gain: market value at exercise minus exercise price). (b) BADR is not automatically available on disposal (CGT at 24% instead of 10%). (c) The company may face penalties for incorrect reporting. (5) No extensions — the 92-day deadline is strict and cannot be extended. The company should ensure that the notification is submitted promptly after the grant. Relevant legislation: Schedule 5 ITEPA 2003, Paragraph 22 (notification of EMI grants); Finance Act 2013 (92-day notification requirement); HMRC ERS Online Service. Example: A company grants EMI options to an employee on 1 March 2026. The 92-day deadline is 1 June 2026 (92 days from 1 March). The company must submit the EMI notification through the online ERS service by 1 June 2026. If the notification is submitted on 5 June 2026 (4 days late), the options are not qualifying EMI options, and the tax advantages are lost. Common mistake: Not tracking the 92-day deadline for each grant. Companies should have a system in place to ensure that the notification is submitted within 92 days of each grant date. Missing the deadline is the most common reason for the loss of EMI tax advantages.

What is the EMI annual return?

The EMI annual return must be filed by 6 July after the end of the tax year. It reports the status of the scheme, grants, exercises, releases, and variations during the year. The return is filed through HMRC's online ERS service. The EMI annual return is a yearly report that the company must file for the EMI scheme. Key points: (1) Deadline — the annual return must be filed by 6 July after the end of the tax year (e.g., by 6 July 2026 for the 2025/26 tax year). (2) Method — the return is filed through HMRC's online ERS service. (3) Content — the annual return reports: (a) The status of the scheme (active, dormant, or closed). (b) Grants made during the year — if the 92-day notification was already submitted, the annual return confirms the grants. If any grants were not notified within 92 days, they should be reported on the annual return (though the options will not be qualifying EMI options). (c) Exercises — any options exercised during the year, including the date, the number of shares, and the gain. (d) Releases — any options released (cancelled) during the year. (e) Variations — any variations to the option terms (e.g., change to the exercise price). (f) Outstanding options — the current status of outstanding options at the end of the tax year. (4) Nil return — if no grants, exercises, or variations occurred during the year, a nil return must still be filed. (5) Penalties — late filing can result in penalties: £100 for late filing, increasing to £300 after 3 months and £1,200 after 6 months. (6) Amendment — the annual return can be amended within 12 months of the filing deadline. The annual return ensures that HMRC has up-to-date information about the EMI scheme and the employees' options. Relevant legislation: Schedule 5 ITEPA 2003, Paragraph 22 (annual reporting); Finance Act 2013 (annual return requirement); HMRC ERS Online Service. Example: A company has an active EMI scheme during the 2025/26 tax year. It granted 5 new EMI options (all notified within 92 days), had 2 exercises, and 1 release during the year. The annual return, due by 6 July 2026, reports the scheme status (active), the 5 grants, the 2 exercises, the 1 release, and the outstanding options at 5 April 2026. Common mistake: Not filing a nil return when no grants or exercises occurred. A nil return is required even if there was no activity during the year. Failing to file can result in penalties.

What records do I need to keep for EMI?

Keep: EMI plan rules and amendments, individual option agreements, board minutes approving grants, HMRC Advance Assurance letters, records of grants/exercises/releases/variations, share valuations and evidence. Records must be kept for at least 6 years. The company must maintain detailed records of the EMI scheme to support the tax advantages and respond to HMRC enquiries. Required records: (1) EMI plan rules — the formal plan rules and any amendments. The plan rules set out the terms and conditions of the EMI options. (2) Individual option agreements — the individual option agreements for each employee, signed by the company and the employee. The agreement should include the grant date, the number of shares, the exercise price, the market value at grant, and the exercise period. (3) Board minutes — minutes of the board meeting(s) approving the EMI plan and the individual grants. (4) HMRC Advance Assurance letters — if Advance Assurance was obtained, the letter from HMRC confirming the market value. (5) Grant notifications — copies of the 92-day notifications submitted to HMRC. (6) Exercise records — records of options exercised, including the exercise date, the number of shares, the exercise price, the market value at exercise, and the gain. (7) Release and variation records — records of any options released (cancelled) or varied (e.g., change to exercise price). (8) Share valuations — the share valuation reports and supporting evidence (financial statements, comparables, methodology). (9) Annual returns — copies of the annual returns filed with HMRC. Records must be kept for at least 6 years after the end of the tax year to which they relate (e.g., records for the 2025/26 tax year must be kept until 5 April 2032). In practice, it is advisable to keep records for longer, as HMRC can open enquiries into EMI schemes for several years after the grant. Relevant legislation: Schedule 5 ITEPA 2003, Paragraph 22 (record-keeping); TMA 1970, Section 12B (record-keeping for self-assessment). Example: A company grants EMI options in March 2026. It keeps: the EMI plan rules (approved by the board), the individual option agreements (signed by the company and each employee), the board minutes approving the grants, the HMRC Advance Assurance letter, the 92-day notification confirmations, the share valuation report, and the annual return. All records are kept for at least 6 years (until April 2032). Common mistake: Not keeping the individual option agreements or the share valuation reports. These documents are essential to prove that the EMI options were correctly granted and valued, and without them, the tax advantages may be challenged by HMRC.

What happens if I miss the 92-day EMI notification?

If the 92-day notification is missed, the options are not qualifying EMI options. Income tax and NIC are due on exercise (on the gain), and BADR is not automatically available on disposal (CGT at 24% instead of 10%). The loss of tax advantages can be significant for employees. Missing the 92-day EMI notification deadline is one of the most serious compliance failures for an EMI scheme. The consequences: (1) Non-qualifying options — the options are not qualifying EMI options. The EMI tax advantages are lost: (a) No income tax or NIC on exercise — this advantage is lost. Income tax (at up to 45%) and NIC are due on the gain at exercise (market value at exercise minus exercise price). (b) 18% BADR on disposal — this advantage is lost. The gain on disposal is subject to CGT at 24% (for higher-rate taxpayers), not 10% BADR. (2) Comparison — on a gain of £500,000: (a) Qualifying EMI: £50,000 tax (10% BADR). (b) Non-qualifying (late notification): up to £225,000 income tax on exercise (45% of £500,000) + £0 CGT = £225,000 total. The difference is £175,000. (3) No retrospective fix — the 92-day deadline cannot be extended. Once missed, the options are permanently non-qualifying (there is no mechanism to 'fix' the late notification). (4) Employee impact — the employees may face significant tax charges that they were not expecting. This can lead to dissatisfaction and potential claims against the company for the loss of tax advantages. (5) Company liability — the company may face penalties for incorrect reporting and may be liable to the employees for the tax cost of the non-qualification. To avoid missing the deadline, the company should have a robust process for submitting the 92-day notification promptly after each grant. Specialist advice is recommended to ensure compliance. Relevant legislation: Schedule 5 ITEPA 2003, Paragraph 22 (92-day notification requirement); ITEPA 2003, Part 7 (tax treatment of non-qualifying options). Example: A company grants EMI options on 1 March 2026 but forgets to submit the 92-day notification until 1 July 2026 (122 days later). The options are not qualifying EMI options. When the employee exercises the options, income tax and NIC are due on the gain (at up to 45%). When the employee sells the shares, CGT is due at 24% (not 10% BADR). The total tax may be £175,000 higher than if the options had been qualifying EMI options. Common mistake: Assuming that late notification can be fixed. The 92-day deadline is strict and cannot be extended. Once missed, the options are permanently non-qualifying, and the tax advantages cannot be recovered.

Do I need to register the EMI scheme with HMRC?

Yes. Before submitting the 92-day notification, the company must register the EMI scheme with HMRC through the online ERS service. The registration provides a scheme reference number, which is used for all subsequent notifications and returns. Before submitting the 92-day notification for the first EMI option grant, the company must register the EMI scheme with HMRC. The registration process: (1) Online ERS service — the company registers the scheme through HMRC's online Employment-Related Securities (ERS) service. The registration is done by a company officer (director or secretary) or an authorised agent. (2) Scheme details — the registration requires: (a) The company's name, UTR (Unique Taxpayer Reference), and Companies House number. (b) The scheme name (e.g., 'ABC Limited EMI Scheme'). (c) The scheme type (EMI). (d) The date the scheme was established (board approval date). (e) The principal contact for the scheme. (3) Scheme reference number — once registered, HMRC provides a scheme reference number. This number is used for all subsequent notifications (92-day notifications, annual returns, etc.). (4) No HMRC approval — unlike CSOP (which requires HMRC plan approval), EMI does not require HMRC approval of the plan rules. The company simply registers the scheme and submits notifications. However, the plan rules must still meet the statutory EMI requirements. (5) Timing — the registration should be done before the first grant (or at least before the 92-day notification deadline). The registration is a one-time process and does not need to be repeated each year. (6) Agent access — if the company uses a professional adviser (e.g., a tax adviser or accountant) to manage the scheme, the adviser can be given agent access to the ERS service. The registration is a simple but essential step — without it, the company cannot submit the 92-day notifications or annual returns, and the EMI scheme cannot operate. Relevant legislation: Schedule 5 ITEPA 2003, Paragraph 22 (scheme registration); HMRC ERS Online Service guidance. Example: A company plans to grant EMI options in March 2026. Before granting the options, it registers the EMI scheme on HMRC's ERS service. HMRC provides a scheme reference number (e.g., EMI/2026/12345). The company uses this reference number to submit the 92-day notification for each grant and the annual returns. Common mistake: Granting EMI options before registering the scheme. The registration should be done first, so that the company has the scheme reference number ready for the 92-day notification. Granting options before registration can delay the notification and risk missing the 92-day deadline.

Share Schemes › Compliance

HMRC EMI Notification & Reporting

EMI requires timely notification of grants (within 92 days) and annual reporting. Understand the deadlines, compliance obligations, and the consequences of non-compliance.

Book a Consultation +44 (0) 800 211 8657

EMI has specific notification and reporting requirements that must be met to maintain the tax advantages. The most critical is the 92-day notification deadline — the company must notify HMRC of each EMI option grant within 92 days of the grant date. Missing this deadline can result in the options not being qualifying EMI options, with the loss of all tax advantages. Understanding the notification and reporting requirements is essential for any company operating an EMI scheme.

The 92-Day Notification

The company must notify HMRC of each EMI option grant within 92 days of the grant date. The notification includes: (1) The employee's details (name, National Insurance number). (2) The number of shares under option. (3) The exercise price. (4) The market value at grant. (5) The grant date. (6) Whether Advance Assurance was obtained. The notification is made through HMRC's online ERS service. Late notification can result in the options not being qualifying EMI options.

Annual Returns

The company must file an annual return for the EMI scheme by 6 July after the end of the tax year. The annual return reports: (1) The status of the scheme (active, dormant, or closed). (2) Grants made during the year (if not already reported through the 92-day notification). (3) Exercises, releases, and variations during the year. (4) The current status of outstanding options. The annual return is filed through HMRC's online ERS service.

Record-Keeping

The company must maintain detailed records of the EMI scheme, including: (1) The EMI plan rules and any amendments. (2) Individual option agreements for each employee. (3) Board minutes approving the grants. (4) HMRC Advance Assurance letters. (5) Records of grants, exercises, releases, and variations. (6) Share valuations and supporting evidence. Records must be kept for at least 6 years after the end of the tax year to which they relate.

Consequences of Non-Compliance

Non-compliance with the EMI notification and reporting requirements can have serious consequences: (1) Loss of tax advantages — if the 92-day notification is missed, the options are not qualifying EMI options, and the tax advantages (no income tax on exercise, 10% BADR) are lost. (2) Penalties — late filing of the annual return can result in penalties (starting at £100, increasing for continued delay). (3) Enquiries — non-compliance increases the risk of HMRC enquiries, which can be costly and time-consuming. (4) Employee dissatisfaction — if the tax advantages are lost due to non-compliance, employees may face unexpected tax charges, leading to dissatisfaction and potential claims against the company.

Key Points

What You Need to Know

EMI option grants must be notified to HMRC within 92 days of the grant date
Annual returns must be filed by 6 July after the end of the tax year
Records must be kept for at least 6 years after the end of the tax year
Missing the 92-day notification can result in the loss of all EMI tax advantages
Late annual returns can result in penalties starting at £100

Expert Answers

Share Schemes Frequently Asked Questions

Detailed answers with legislation references, practical examples and common pitfalls.

Explore More

All Share Schemes Topics

EMI Eligibility & Qualifying Companies EMI Tax Advantages Company Share Option Plan (CSOP)Growth Shares Business Asset Disposal Relief (BADR)Share Schemes on Exit Save As You Earn (SAYE / Sharesave)Unapproved Options & RSUs Share Incentive Plan (SIP)Employee Ownership Trusts (EOTs)Share Valuation for EMI & CSOP HMRC EMI Notification & Reporting Phantom Shares & Cash-Settled Awards Share Schemes on IPO

Need Specialist Share Schemes Advice?

Our tax advisers can help you navigate share schemes with clear, practical advice tailored to your circumstances.

Book a Consultation Call +44 (0) 800 211 8657