What is an EMI annual return?

If we are maintaining your EMI option scheme, we’ll prepare and file the EMI annual return regarding any activity on your EMI scheme for you. In order to this, you’ll need to appoint Simply Equity as your tax agent – see ‘Register your EMI scheme and add Simply Equity as tax agent

To see what is involved, the HMRC template and guidance notes can be found here.

An EMI annual return for the previous tax year must be submitted online to HMRC by midnight 6 July. For example, on 6 July 2024 the EMI annual return is made in relation to any activity from 6 April 2023 to 5 April 2024. HMRC don’t issue reminders and a minimum £100 penalty will apply for any late returns.

What sort of activity on EMI options?

There are five different types of activities as regards EMI options to be reported by completing prescribed details on different spreadsheets. These are:

  • If, following a variation in the share capital of the company, there has been an adjustment of the EMI option price or there has been a change in the description of shares under the EMI option – EMI40_Adjustments_V4
  • Details of EMI options replaced in relation to a company reorganisation – EMI40_Replaced_V4
  • Details where EMI options have been released, lapsed or cancelled – EMI40_RLC_V4
  • Details of the non-taxable exercise of EMI options – EMI40_NonTaxable_V4
  • Details of the taxable exercise of EMI options – EMI40_Taxable_V4.

What if there was no activity on EMI options?

A ‘nil’ return must be submitted for EMI options if there has been no reportable activity.

Is an annual return needed for non-qualifying options?

Annual returns are required if non-qualifying options have been granted to UK tax resident employees or directors as non-tax advantaged Employment Related Securities. The HMRC template, technical note and guidance notes can be found here.

The relevant spreadsheets are:

  • Details of each option granted – Other_Grants_V4
  • Details of options exercised, released, assigned, cancelled or lapsed – Other_Options_V4.

Please Note: This article contains general information only and Simply Equity is not, through this article, issuing any advice, be it legal, financial, tax-related, business-related, professional or other. This article is not a substitute for professional advice and should not be used as such. Simply Equity does not assume any liability for reliance on the information provided in this article.