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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

Enterprise Management Incentives (EMI): Option notifications: Registration & notice of grant of option to HMRC


If a company grants EMI options, including replacement options, it must notify these to HMRC using the online ERS service (paragraph 44(8)) within 92 days of the date of grant (paragraph 44(1)). From 6 April 2014 companies granting EMI options will need to have registered with the PAYE online service (if they have not already done so) and register the scheme (or other arrangement) under which options are granted before they make the first notification of grants of EMI options. Online ERS notification of EMI options is a mandatory requirement. If a company feels it is unable to file online for any reason, it should provide full details explaining why this is the case to the Employee Shares and Securities Team –

Post: Charities, Savings and International 2, HM Revenue & Customs, BX9 1BU.


Guidance on registering schemes and notification of options can be found here:


Reasonable Excuse

If a company believes it has a reasonable excuse for not notifying HMRC on time, it should send the notification without unreasonable delay once the excuse ceases to exist. The company should advise HMRC of all of the facts relevant to the delay. A delay or failure on the part of the company’s agent is not a reasonable excuse on its own.

If HMRC accept that the company has a reasonable excuse for not notifying the grant of option within 92 days of the date of grant, they will provide the company with a reasonable excuse code to enable the notification to be submitted online.

If the option is granted by the trustee of an employee benefit trust or another shareholder, the employer is still bound by the requirement to notify the grant of the option. The employer will need to obtain the relevant information from the trustee or shareholder to comply with this requirement, which is set out at Schedule 5 (paragraph 44).

Working time declaration

From 6 April 2014, companies must:

  • obtain a written declaration by the employee that he or she satisfies the working time commitment, and
  • submit notification of the grant to HMRC electronically (including a declaration by a director or the company secretary of the employer company that the requirements of Schedule 5 are met and that the information provided is to the best of his or her knowledge correct and complete).

Paragraph 44(5)(c) requires the employee to sign a written declaration. This declaration can be electronic with adequate proof of consent e.g. an e-signature by the employee sending an e-mail to the company containing the declaration. 

The employer must provide a copy of the working time declaration to the employee and must also retain the declaration so that it is available for inspection by HMRC. Penalties may be applied if a copy is not given to the employee within seven days of it being signed, or if the declaration is not provided to HMRC within seven days of a request to see it. If the declaration is given by the employee to the company by e-mail, it is unnecessary for the company to provide the employee with a copy of the declaration - paragraph 44(5A)(b) will be treated as satisfied in these circumstances, since the employee will automatically have a copy of the e-mail sent to the company.

It is acceptable for the employee’s working time declaration to be contained within the option agreement itself, provided that the option agreement is signed by the employee and the employee receives a copy of the option agreement within seven days of such signature.