Employment-Related Securities: HMRC Annual Return Deadline and 2026 EMI Regime Changes

The deadline for filing UK employment-related securities annual return(s) for the 2025-26 tax year is 6 July 2026.  Companies will need to have filed an annual return with HMRC for each type of share scheme they operate (EMI, CSOP or “Other” types) by the 6 July deadline to avoid incurring automatic penalties.

• In the case of EMI options, if these are not notified to HMRC by the 6 July deadline, they will not be eligible to qualify for income tax relief.
• In the case of CSOP options, the scheme must be registered by the 6 July deadline for the CSOP options to qualify for income tax relief.

We have set out further information below covering the steps you are required to take to satisfy these filing obligations.

What do you need to do?

In order to file an annual return with HMRC companies must first have registered the relevant scheme with HMRC via an HMRC Online Services account. This applies to all tax-favoured schemes (e.g., EMI or CSOP) and non-tax favoured schemes (including unapproved options, restricted shares and growth shares). If it is the first year operating the employee share scheme, the company will need to register the scheme before any annual reporting can be completed, which can take up several days. Our top tip is to start early.

Companies must then file an annual return for each of those schemes by 6 July 2026 covering all reportable activity in the tax year 2025-26 relating to equity incentives held by the company’s employees, directors and office holders. Reportable activity includes:

• Grant of options
• Exercise of options
• Certain lapses of options
• Certain cancellation of options
• Acquisition of shares
• Any events under the restricted securities legislation and anti-avoidance rules

If there has been no reportable activity within a tax year, companies still must file a “nil” return to avoid any incurring penalties for non-filing.

For future diligence exercises, it is very important to ensure to keep records or screenshots of each page of each annual return submission, the filing receipt and any spreadsheets which are uploaded on HMRC’s site to prove the returns have been filed correctly (e.g., for future diligence exercises).

HMRC deadline for notifying EMI options

The deadline for notifying EMI options granted between 6 April 2025 and 5 April 2026 is 6 July 2026.  We recommend notifications are made as soon as possible to minimise the risk the deadline is missed. If a company fails to notify HMRC of EMI option grants, the EMI options will not qualify.

Please note it is very important to keep records or screenshots of each page of the notification submission and the filing receipt to prove the EMI option has been properly notified.

EMI changes from 2026 tax year onwards

As discussed in our previous coverage of EMI regime changes which were announced in the 2025 Autumn Budget, a number of updates to the EMI regime take effect from 6th April 2026, namely:

• An increase in the company value limit from £30 million to £120 million;
• An increase in the company headcount limit from 250 employees to 500;
• An increase in the overall company limit for the value of outstanding EMI options from £3 million to £6 million; and
• An increase in the permissible lifespan of EMI options from 10 years to 15 years.

Outstanding EMI options granted with a 10-year lifespan may be modified retrospectively to increase the lifespan of the option to 15 years, without disrupting the tax treatment of the outstanding options.