Guidance

(From April 2027) Share Incentive Plan: guidance notes

Updated 2 November 2026

This guidance explains how to complete the questions in the Share Incentive Plan (SIP) 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, you can check: (From April 2027) Share Incentive Plan: technical note.

The current SIP 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 SIP ERS 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 and self-certified SIP scheme.

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 SIP end of year return where it asks if the shares are listed on a recognised stock exchange and the answer is no, 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

There are no common fields used across the SIP worksheets. 

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.

You should not leave blank rows between the rows of data you are reporting. The system will continue to check for information on subsequent sheets within the same end of year return.

8. SIP_Awards_V7 worksheet

Use this worksheet to tell HMRC about SIP shares acquired or awarded in the tax year.

8.1 Question 1: Date of event

Enter date the shares were acquired by or awarded to the employee.

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

This field is mandatory.

8.2 Question 2: Number of employees who acquired or were awarded shares

Enter total number of employees who acquired or were awarded shares on this date. For example, 1000.

This field is optional.

8.3 Question 3:  Type of shares awarded

Enter a number from 1 to 4 depending on the type of share awarded.

1. Matching shares: shares awarded to the employee at a ratio of no more than 2 matching shares to 1 partnership share.
2. Free shares: shares awarded at no cost to the employee.
3. Partnership shares: shares bought using deductions from the employee’s gross pay.
4. Dividend shares: shares bought from dividends paid on shares already held in the SIP.

Only enter the number. Do not enter the text.

This field is mandatory.

8.4 Question 4: If free shares, are performance conditions attached to their award?

Enter yes or no.

Free shares are awarded to employees without any payment by the employee towards their cost.

Some awards of free shares may be subject to performance conditions that the employee must meet to qualify for the award.

This field is conditional mandatory.

8.5 Question 5: If matching shares, what is the ratio of matching shares to partnership shares?

Enter ratio in the correct format (for example, 2:1 or 2/1)

Enter the ratio with the matching portion on the left side of the ratio.

The following are examples of how to report matching share awards.

Example 1 ― simple matching to partnership share ratio

The matching share ratio is 1:1 up to the first £100 contributed and then there is no further match.

Using this ratio, an employee who contributes £200 will therefore receive £200 partnership shares and £100 matching shares.

Enter the partnership share award in one line and the matching share award in a separate line.

In the line in which you provide details of the matching share award you would enter 1:1 in column 5 of that line.

Example 2 ― tiered ratio

This is 1 matching share for 1 partnership share ratio on the first £20, then 1 matching share for 2 partnership shares on the next £80 and then no match thereafter. You record partnership share awards on one line and each matching share award entry separately.

For example, an employee who contributes £200 will therefore receive £200 partnership shares and £60 matching shares under this rule.

You would record £200 partnership shares in one line, then £20 matching shares in another line and enter 1:1 in Column 5 of that line.

In another line, enter £40 and 1:2 in column 5 of that line.

This field is conditional mandatory.

8.6 Question 6: Unrestricted market value (UMV) per share on acquisition or award

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

This field is optional.

8.7 Question 7: Total number of shares acquired or awarded

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

Do not enter the value of shares acquired or awarded to all the employees on this date.

This field is optional.

8.8 Question 8: Total value of shares acquired or awarded

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

Enter the total unrestricted market value of all shares acquired or awarded to all the employees on this date.

This field is optional.

8.9 Question 9: Total number of employees whose award of free shares during the year exceeded the limit of £3,600

Enter in figures the total number of employees whose free share awards exceed the annual limit (for example, 1000).

This field is optional.

8.10 Question 10: Total number of employees whose award of free shares during the year was at or below the limit of £3,600

Enter in figures the total number of employees whose free share awards did not exceed the annual limit (for example, 1000).

This field is optional.

8.11 Question 11: Total number of employees whose award of partnership shares during the year exceeded the limit of £1,800

Enter in figures the total number of employees whose partnership share awards exceeded the annual limit. This includes where a residual partnership share deduction has been carried forward from the previous tax year and leads to the partnership share limit being exceeded (for example, 1000).

This field is optional.

8.12 Question 12: Total number of employees whose award of partnership shares during the year was at or below the limit of £1,800

Enter in figures the total number of employees who acquired partnership shares within the annual limit (for example, 1000).

This field is optional.

8.13 Question 13: Total number of employees whose award of matching shares during the year exceeded the limit of £3,600

Enter in figures the total number of employees whose matching share awards exceed the annual limit (for example, 1000).

This field is optional.

8.14 Question 14: Total number of employees whose award of matching shares during the year was at or below the limit of £3,600

Enter in figures the total number of employees whose matching share awards does not exceed the annual limit (for example, 1000).

This field is optional.

8.15 Question 15: Are the shares listed on a recognised stock exchange?

Enter yes or no.

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

If you enter ‘no’, go to question 16.

This field is mandatory.

8.16 Question 16: If no, was the market value agreed with HMRC?

Enter yes or no.

The market value of shares can be agreed with HMRC in advance of the award of shares from a SIP.

If ‘yes’, go to question 17.

This field is conditional mandatory.

8.17 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 is conditional mandatory.

9. SIP_Out_V7 worksheet

Use this worksheet to tell HMRC about shares that employees have withdrawn from the SIP and are no longer part of the plan. Do not include forfeited shares.

9.1 Question 1: Date of event

Enter date the shares were withdrawn by the employee or the date the employee was no longer employed.

Use the format yyyy‑mm‑dd (for example, for example, 2023-10-31)

This field is mandatory.

9.2 Question 2: Employee first name

This is the employee’s first name.

This field is mandatory.

9.3 Question 3: Employee second name (optional)

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

This field is optional.

9.4 Question 4: Employee last name

This is the employee’s last name.

This field is mandatory.

9.5 Question 5: National Insurance number

Enter in the correct format (for example, QQ123456C).

Most individuals included on an ERS return 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 return 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 of the following: 

• 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.

9.6 Question 6: PAYE reference of the employing company

Enter the PAYE reference number of the SIP participant’s employing company.

The employing company is the organisation with the PAYE obligation.

This field is mandatory.

9.7 Question 7: Number of free shares ceasing to be part of the plan

Enter in figures the total number to 2 decimal places (for example, 100.00).

Do not enter the value of free shares per employee ceasing to be part of the plan.

This field is optional.

9.8 Question 8: Number of partnership shares ceasing to be part of the plan

Enter in figures the total number to 2 decimal places (for example, 100.00)

Do not enter the value of partnership shares per employee ceasing to be part of the plan.

This field is optional.

9.9 Question 9: Number of matching shares ceasing to be part of the plan

Enter in figures the total number to 2 decimal places (for example, 100.00)

Do not enter the value of matching shares per employee ceasing to be part of the plan.

This field is optional.

9.10 Question 10: Number of dividend shares ceasing to be part of the plan

Enter in figures the total number to 2 decimal places (for example, 100.00).

Do not enter the value of dividend shares per employee ceasing to be part of the plan.

This field is optional.

9.11 Question 11: Unrestricted market value per free share at date ceased to be part of the plan

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

Enter the unrestricted market value of a free share on the date the shares ceased to be part of the plan.

This field is optional.

9.12 Question 12: Unrestricted market value per partnership share at date ceased to be part of the plan.

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

Enter the unrestricted market value of a partnership share on the date the shares ceased to be part of the plan.

This field is optional.

9.13 Question 13: Unrestricted market value per matching share at date ceased to be part of the plan

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

Enter the unrestricted market value of a matching share on the date the shares ceased to be part of the plan.

This field is optional.

9.14 Question 14: Unrestricted market value per dividend share at date ceased to be part of the plan

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

Enter the unrestricted market value of a dividend share on the date the shares ceased to be part of the plan.

This field is optional.

9.15 Question 15: Have all the shares been held in the plan for 5 years or more at the date they ceased to be part of the plan?

Enter yes or no.

If ‘yes’, no more information is needed for this event. If ‘no’, go to question 16.

This field is mandatory.

9.16 Question 16: If no, for other than dividend shares, was PAYE operated

Enter yes or no.

PAYE should have been operated if the shares can readily be converted into cash. There are exceptions, for example, where the employee left employment because of injury, disability or redundancy.

This field is conditional mandatory.

9.17 Question 17: If no, does this withdrawal of shares qualify for tax relief?

Enter yes or no.

Tax relief is sometimes applied to shares that are withdrawn early, less than 3 or 5 years from the date of the award or acquisition.

Usually this will be because the employee is a good leaver — often someone who has left employment on grounds of injury, disability or redundancy.

This field is conditional mandatory.