Guidance

(From April 2027) Enterprise Management Incentives (EMI): guidance notes

Updated 2 November 2026

This guidance explains how to complete the questions in the Enterprise Management Incentives (EMI) Employment Related Securities (ERS) annual end of year return. It also identifies which questions are mandatory, conditional mandatory or optional. 

 

There have been some changes made to the end of year return headings. If you wish to create your own end of year template, check (From April 2027) Enterprise Management Incentives (EMI): technical note for more information.  

The current EMI Employment Related Securities end of year return is version 7.

1. Who must submit an end of year return  

The company secretary, or the person acting as company secretary, must submit an online end of year return by 6 July following the end of the tax year.

In circumstances where the employee is employed by an Employer of Record (EoR), the EoR is responsible for submitting the returns. 

An end of year return must be submitted for each registered EMI ERS scheme or arrangement.

2. When to submit an end of year return or a nil return

If you operate an ERS scheme, you are required to submit an end of year ERS return, including nil returns, for every scheme registered.

If your scheme has ended and you have entered a final event date, you must submit any outstanding returns up until the date that it ended.

3. Completing and uploading your end of year return

3.1 Checking your end of year return

You can use the Employment related securities (ERS) checking service to check your end of year return.  

The service: 

• shows where formatting errors occur which will prevent your end of year return being submitted successfully
• can be used as often as needed
• helps you correct errors early, making submission easier

You can also access the checking service through ‘View my schemes and arrangements’ on the online ERS service

4.  General guidance on valuations

All values must be entered in pounds sterling to 4 decimal places.

Where necessary:

• round up figures ending in 5 or more
• round down figures ending in 4 or less

If a value is quoted in another currency, use a reputable currency converter to convert it to pounds sterling.

You do not need to formally agree valuations of shares and securities with HMRC.

Where shares are not listed on a recognised stock exchange, you may have asked HMRC for a valuation. If a valuation was agreed with HMRC:

• enter the valuation reference number on the end of year return
• if the reference is prefixed with Company Reference Number (CRN), do not enter those letters

If no valuation was agreed, you must retain records showing how the valuation was reasonably determined.

4.1 Actual Market Value (AMV)

AMV is the value of a share or security after taking account of:

• restrictions
• risk of forfeiture

4.2 Unrestricted Market Value (UMV)

UMV is the value of a share or security ignoring:

• restrictions
• risk of forfeiture

4.3 Recognised stock exchanges

For more information about recognised stock exchanges read Recognised stock exchanges: definition, legislation and tables.  

AIM (Alternative Investment Market) and PISCES (Private Intermittent Securities and Capital Exchange System) are not recognised stock exchanges for these purposes.  

5.  General guidance on completing the end of year return

5.1 Mandatory, conditional mandatory, and optional fields

Mandatory — a response is always required regardless of any other information provided. 

Conditional Mandatory — a response is only required if you have provided a response to a mandatory question.

For example, on the EMI end of year return where it asks if the shares are listed on a recognised stock exchange and the answer is yes, then the next question will require a response. 

Optional — this field can be left blank but should be completed if you know the information requested. 

If a conditional mandatory, or optional field does not require a response, leave it blank.

Do not enter:

• ‘N/A’
• ‘not applicable’

Doing so will cause your end of year return to be rejected.

5.2 Yes and no answers

The following formats are accepted:

• Yes, yes, YES
• No, no, NO

6. Common worksheet fields

The following fields appear on most EMI worksheets. Please refer to this section when completing the common field questions.

6.1 Nature of the disqualifying event

Enter a number from 1 to 8 to indicate which of the following disqualifying events applies:

1. The company has come under the control of another company. Loss of independence is a disqualifying event unless it arises from a qualifying company reorganisation, where a qualifying replacement option applies.
2. The company has stopped meeting the trading activities requirement.
3. The option holder no longer meets the working time requirement.
   To qualify for EMI options, an employee must:
   • work for the company whose shares are subject to the option (or a qualifying subsidiary), and
   • work at least 25 hours per week, or if working fewer hours, 75% of their working time.
4. The terms of the option have changed, increasing the value of the shares or meaning the option is no longer a qualifying option.
5. A change in share capital has resulted in a disqualifying event. This includes changes to rights or restrictions that are not made for commercial reasons, or changes intended to increase the value of the shares.
6. The shares have been converted into a different class, and the conversion did not apply to the whole class.
7. The option holder has exceeded the maximum permitted holding of EMI and Company Share Option Plan (CSOP) options, following the grant of a Schedule 4 CSOP option, taking the total unrestricted market value above £250,000.
8. The company has not started to carry on a qualifying trade within 2 years of granting the option, or preparations to carry on a qualifying trade have ended.

Further guidance on disqualifying events can be found in the Employee Tax Advantaged Share Scheme User Manual. 

This field is conditional mandatory.

6.2 Exercise price per share 

Enter the value in pounds to 4 decimal places (for example: 10.1234).

Enter the price at which the employee was granted the option. It is the price the employee will pay for each share on the exercise of the share option.

This field is optional.

6.3 Employee first name 

This is the employee’s first name. 

This field is mandatory.

6.4 Employee second name (optional).  

 If the employee has a second name, then enter in this column.

This field is optional.

6.5 Employee last name 

This is the employee’s last name. 

This field is mandatory.

6.6 National Insurance number

Enter in the correct format, for example, QQ123456C 

Most individuals included on an ERS end of year return will have a National Insurance number.
In exceptional cases, use an alternative reference instead.

This reference must:

• only be used on the ERS end of year return
• not be used in any other HMRC correspondence
• not be given to the individual

Where there are exceptional circumstances, the required format for the alternative ERS reference will be a total of 9 characters. This will be 2 letters, 6 numbers and one letter consisting of: 

• TN – to indicate an ERS reference 

• Employee Date of Birth in format DDMMYY (for example, 080403) ― this data will enable HMRC to trace the individual 

• No National Insurance number Reason Identifier (X, Y or Z) ― this is to identify the reason why an individual does not have a National Insurance number 

• X ― Under 16 years old 

• Y ― Applied for a National Insurance number and is waiting to receive it 

• Z — Never paid National Insurance contributions as they have not been liable to UK National Insurance contributions ― for example, they’re not resident in the UK or are an ‘intra-company worker’ on transfer to work in the UK 

This field is mandatory.

6.7 PAYE reference

Enter the PAYE reference number of the company that employs the employee.

The employing company is the organisation with the PAYE obligation.

This field is mandatory.

7. Worksheet specific guidance

The following sections explain when to use each worksheet and how to complete its questions.

Use a separate row for each individual unless stated otherwise.

(All worksheet definitions, questions, routing rules, thresholds, examples and calculations remain unchanged and are presented in a clearer sequence below.)

When completing the end of year return if you leave 10 or more consecutive rows blank with no data populated, it will be assumed that there is no further information contained below these blank rows within the sheet. Therefore, it is important you do not leave blank rows between the rows of data you are reporting. Note the system will continue to check for information on subsequent sheets within the same end of year return.

8. EMI40_Adjustments_V7 worksheet

Use this worksheet to tell HMRC about EMI options that were adjusted in the tax year.

8.1 Question 1: Has there been any adjustment of options following a variation in the share capital of the company? 

Enter yes or no.

When an adjustment is made to a company’s share capital, there is normally: 

• an adjustment to the number of shares in issue 

• an adjustment to the value of the shares 

• a combination of the above 

This will affect the option granted and the exercise price of each share under option. 

This field in mandatory.

8.2 Question 2: Has there been a change to the description of the shares under option? 

Enter yes or no. 

Enter yes if the description of the shares changed because of the adjustment.

Otherwise, enter no.

This field in conditional mandatory.

8.3 Question 3:  Is the adjustment a disqualifying event? 

• If it is a disqualifying event, enter yes and go to question 4.
• If it is not a disqualifying event, enter no and go to question 5.

This field in conditional mandatory.

8.4 Question 4:  If yes, enter a number from 1 to 8 depending on the nature of the disqualifying event

See common fields guidance under section 6 for the list of disqualifying events.

This field in conditional mandatory.

8.5 Question 5: Date option adjusted

Enter the date the option adjustment was made.

Use the format yyyy‑mm‑dd (for example: 2023‑10‑31).

This field in mandatory.

8.6 Question 6 to 10

See common fields guidance under section 6.

8.11 Question 11: Exercise price per share under option before adjustment

Enter the value in pounds to 4 decimal places (for example: 10.1234).

This is the price the employee would have paid before the adjustment.

This field in optional.

8.12 Question 12: Number of shares under the option after adjustment

Enter the total number of shares, to 2 decimal places (for example: 100.00).

This is the total number of shares under the option after the adjustment was made. 

This field in optional.

8.13 Question 13: Exercise price per share under option after the adjustment 

Enter the value in pounds to 4 decimal places (for example: 10.1234).

Enter the exercise price following the adjustment

This field in optional.

8.14 Question 14: Actual market value of a share at the date of grant

Enter the value in pounds to 4 decimal places (for example: 10.1234).

Enter the actual market value of the EMI shares at the date of grant before the adjustment was made. 

This field in optional.

9. EMI40_Replaced_V7 worksheet

Use this worksheet to tell HMRC about EMI options replaced following a company reorganisation.

9.1 Question 1: Date of grant of old option

Enter the date in the correct format (for example: 2023-10-31).

Enter the date the original EMI option was granted to the employees.

If several EMI options are being replaced by a single grant of an EMI option, then enter the date of the oldest EMI option being replaced. 

This field in mandatory.

9.2 Question 2: Date of grant of new option 

Enter the date in the correct format (for example: 2023-10-31).

Enter the date replacement EMI options were granted to the employees. 

This field in mandatory.

9.3 Question 3 to 7

See common fields guidance under section 6.

9.8 Question 8: Actual market value of original shares at the date the option(s) were replaced 

Enter the value in pounds to 4 decimal places (for example: 10.1234).

This field in optional.

9.9 Question 9: Name of the company whose shares are the subject of the new option 

Enter the name of the company whose shares are used to grant the new EMI option. 

This field in mandatory.

9.10 Questions 10 to 15: Company details

Enter the details of the company whose shares are subject to the new EMI option, including:

• Company address line 1 - This field in mandatory.
• Company address line 2 - This field in optional.
• Company address line 3 - This field in optional.
• Company address line 4 - This field in optional.
• Country - This field in optional.
• Postcode - This field in mandatory.

9.16 Corporation Tax reference (Unique Taxpayer Reference)

This is 10 numbers long and issued to the company by HMRC for Corporation Tax purposes.

This field in optional.

9.17 Company Reference number (CRN)

This is the specific number issued by Companies House to UK registered companies. If the company is not UK registered or does not have this number, then do not make any entry in this column.

This field in optional.

10. EMI40_RLC_V7 worksheet

Use this worksheet to tell HMRC about options released, lapsed or cancelled in the tax year.

10.1 Question 1: Date of event

Enter the date in the correct format (for example: 2023-10-31).

Enter the date the option was released (including exchanges), lapsed or cancelled.

This field in mandatory.

10.2 Question 2: Is the release, lapse or cancellation the result of a disqualifying event? 

• If yes, go to Question 3
• If no, go to Question 4

This field in mandatory.

10.3 Question 3: If yes, enter a number 1 to 8 depending on the nature of the disqualifying event

See common fields guidance under section 6.

This field in conditional mandatory.

10.4 Question 4 to 8

See common fields guidance under section 6.

10.9 Question 9: Number of shares subject to the option which have been released, lapsed or cancelled? 

Enter the total number of shares to 2 decimal places (for example: 100.00).

Enter the number to 2 decimal places and not the value of shares under option that were released (including exchanges), cancelled or lapsed for which the option can no longer be exercised. 

This field in optional.

10.10 Question 10: Was money or value received? 

Enter yes or no.

• If yes go to question 11 and 12.
• If not, enter no. No further information is needed.

This includes anything that: 

• is of direct monetary value to the employee 

• can be converted into money or something of direct monetary value to the employee 

This field in mandatory.

10.11 Question 11: If yes enter the amount 

Enter the value in pounds to 4 decimal places (for example: 10.1234).

Enter in figures the amount given to the employee for the release (including exchanges), lapsing or cancelling of their EMI option. 

This field in conditional mandatory.

10.12  Question 12: Was PAYE operated?

Enter yes or no.

PAYE should have been operated if the shares are readily convertible into cash, except where the release, lapse or cancellation has occurred after the death of the employee.   

This field is conditional mandatory.

11. EMI40_NonTaxable_V7 worksheet

Use this worksheet to tell HMRC about non‑taxable exercises of EMI options.

11.1 Questions 1:  Date of option exercise 

Enter the date in the correct format (for example: 2023-10-31).

Enter the date the option was exercised by the employee. 

This field in mandatory.

11.2 Question 2 to 6

See common fields guidance under section 6.

11.7 Question 7: Total number of shares employee entitled to on exercise of the option before any cashless exercise or other adjustment

Enter the number to 2 decimal places (for example: 100.00).

State the gross number of shares the employee is entitled to acquire from this exercise and ignore shares sold as part of a cashless exercise procedure.

For example, an employee has options over 200 shares and chooses to exercise the option to acquire 100 shares. 40 of those shares are immediately sold as part of a cashless exercise procedure. You would enter 100 in this field.

This field in optional.

11.8 Questions 8: Actual market value (AMV) of a share at the date of grant of the options exercised

Enter the value in pounds to 4 decimal places (for example: 10.1234).

This field in optional.

11.9 Question 9: Exercise price per share

See common fields guidance under section 6.

This field in optional.

11.10 Question 10: AMV of a share at date of exercise

Enter the value in pounds to 4 decimal places (for example: 10.1234).

This field in optional.

11.11 Question 11: Are the shares listed on a recognised stock exchange?

Enter yes or no.

If no, go to question 12.

If yes, go to question 14.

For more information read Recognised stock exchanges: definition, legislation and tables.  AIM and PISCES are not recognised stock exchanges for these purposes.

This field in mandatory.

11.12 Question 12: If no, was the market value agreed with HMRC?

Enter yes or no.

• If yes, go to question 13.
• If no, go to question 14.

The market value of shares under EMI options can be agreed with HMRC in advance of the date of grant of options.

This field in conditional mandatory.

11.13 Question 13: If yes, enter the HMRC valuation reference given

The HMRC valuation reference is shown on the valuation letter issued by the Shares and Assets Valuation office.

The reference will usually be your Company Reference Number (CRN).

• Enter the reference exactly as shown, including any letters and numbers
• If the reference begins with 3 letters, enter numbers only.

This field in conditional mandatory.

11.14 Question 14: Total amount paid for shares

Enter the value in pounds to 4 decimal places (for example: 10.1234).

Enter the amount paid by the employee to acquire the shares.

This field in optional.

11.15 Question 15: Were all shares resulting from the exercise sold?

Enter yes if:

• the shares were sold on the same day as the exercise in connection with the exercise, or
• sale instructions were given for all shares to be sold on exercise

The application of a price limit should be disregarded

Enter no if:

• any shares were retained, or
• the employee decided later to sell some or all the shares.

This field in mandatory.

12. EMI40_Taxable_V7 worksheet

Use this worksheet to tell HMRC about taxable exercises of EMI options.

12.1 Questions 1: Date option exercised

Enter the date in the correct format (for example: 2023-10-31).

Enter the date option was exercised by the employee.

This field in mandatory.

12.2 Question 2: Is this as a result of a disqualifying event?

If it is a disqualifying event, enter yes and go to question 3.

If it is not a disqualifying event, enter no and go to question 4.

See common fields guidance under section 6.

This field in mandatory.

12.3 Question 3: If yes, enter a number from 1 to 8 depending on the nature of the disqualifying event

See common fields guidance under section 6.

This field in conditional mandatory.

12.4 Question 4 to 8

See common fields guidance under section 6.

12.9 Question 9: Total number of shares employee entitled to on exercise of the option before any cashless exercise or other adjustment

Enter the number to 2 decimal places (for example: 100.00).

This is the gross number of shares and ignoring shares sold as part of a cashless exercise procedure to pay for Income Tax and National Insurance contributions or the exercise price.

For example, an employee has options over 200 shares and choses to exercise the option to acquire 100 shares. 40 of those shares are immediately sold as part of a cashless exercise procedure to pay for the employee’s Income Tax and National Insurance contributions liability. You would enter 100 in this field.

This field in optional.

12.10 Question 10: Actual market value (AMV) of a share at date of grant

Enter the value in pounds to 4 decimal places (for example: 10.1234).

This field in optional.

12.11 Question 11: Exercise price per share

See common fields guidance under section 6.

This field in optional.

12.12 Question 12: AMV of a share at date of exercise

Enter the value in pounds to 4 decimal places (for example: 10.1234).

This field in optional.

12.13 Question 13: Unrestricted market value of a share at date of exercise

Enter the value in pounds to 4 decimal places (for example: 10.1234).

This field in optional.

12.14 Question 14: Total amount paid for the shares

Enter the value in pounds to 4 decimal places (for example: 10.1234).

Enter the total amount the employee paid for the shares.

This field in optional.

12.15 Question 15: Is the company listed on a recognised stock exchange?

Enter yes or no.

If no, go to question 16.

If yes, go to question 18.

For more information read Recognised stock exchanges: definition, legislation and tables. AIM and PISCES are not recognised stock exchanges for these purposes.

This field in mandatory.

12.16 Question 16: Has the market value been agreed with HMRC?

Enter yes or no.

The market value of shares under EMI options can be agreed with HMRC in advance of the date of grant of options.

This field in conditional mandatory.

12.17 Question 17: If yes, enter the HMRC valuation reference given

The HMRC valuation reference is shown on the valuation letter issued by the Shares and Assets Valuation office.

The reference will usually be your Company Reference Number (CRN).

Enter the reference exactly as shown, including any letters and numbers.

If the reference begins with 3 letters, enter numbers only.

This field in conditional mandatory.

12.18 Question 18: Has an election under Section 431(1) been made to disregard restrictions?

Enter yes or no.

Under the employment-related securities tax legislation, it is possible for an employer and employee to enter into a Section 431 election. The effect of a section 431 election is to disregard all or some restrictions depending on how it is made.

This field in mandatory.

12.19 Question 19: Has a National Insurance Contribution election or agreement been operated

Enter yes or no.

This is when the employer and the employee agree or jointly elect for the employee to meet the employer’s liability to pay secondary National Insurance contributions on certain types of share awards and share options gains. The employee can then get a deduction equal to the amount of secondary or employers’ National Insurance contributions transferred when working out the amount chargeable to income tax.

This field in mandatory.

12.20 Question 20: Amount subjected to PAYE

Enter the value in pounds to 4 decimal places (for example: 10.1234).

Enter the amount put through the payroll for PAYE.

This field in optional.