Reminder - file your share plan annual returns with HMRC by 6 July to avoid penalties!

• 6 July 2026 is a hard deadline, and an initial penalty of £100 will be due if a return is just one day late. This year, the 6 July falls on a Monday, so you should aim to file your return by Friday 3 July for peace of mind.
  
  
• HMRC will not issue a reminder to file your returns so don't wait for one! It is a good idea to nominate a person in your team as a back-up administrator for your Government Gateway account in case the main administrator has left the business or is away. To set up a backup administrator, all you need to do is log into your HMRC business tax account and follow the guidance to add a team member.
  
  
• Before you can make an annual return, your share incentive arrangement or plan must be registered with HMRC under the ERS online service (part of the HMRC PAYE online service). If you aren't sure whether an arrangement is already registered, you can check by going to the "view" tab in your ERS online account (through your PAYE online portal). Note that the registration process can take a few days.  Information about the process for registering your share plans can be found here.
  
  
• All your non tax-advantaged arrangements and plans can be registered under a single reference number and a return submitted on the "other" template. In contrast, each of the tax-advantaged plans (CSOP, SAYE, SIP and EMI) must be registered and reported separately.
  
  
• You must submit a return in respect of each share plan registration you have. If there was no activity in the 2025/26 tax year (for example, no new grants or acquisitions), you must still complete a nil return to avoid penalties.
  
  
• Your return will be rejected if it contains formatting errors, so it is a good idea to take advantage of the HMRC checking service before submitting your return. Note that leaving gaps between lines can lead to information not being captured.
  
  
• Before you submit your returns, you should save a copy for your own records. Take screenshots of each page before submitting and save them together with a copy of the confirmation page. This is because the HMRC online service won't save these details and you won't be able to access them again.

• As well as completing an EMI annual return form, companies must notify the grant of EMI options separately using the notification template. The deadline for both the annual return and the notification of grants of EMI Options in the 2025/26 tax year is 6 July 2026.  The Government has announced that from 6 April 2027, the grant of EMI options will no longer need to be notified separately.  Until that change is introduced, you must notify HMRC as usual and, given the tax benefits at stake, we encourage companies to do this as soon as possible after the EMI options are granted.
  
  
• The sale of shares or securities by your employees and directors and the cancellation or exchange of awards may also need reporting. Take advice if you aren't sure as HMRC can charge a penalty of up to £5,000 if a return contains a material inaccuracy.

Globally mobile employees

• As well as UK employees, you may need to make a report in respect of non-UK employees with UK duties.  Note that HMRC has recently issued guidance confirming that companies do not, generally, need to report non-tax advantaged arrangements involving employees who are short term business visitors covered by a special PAYE agreement known as an 'Appendix 4' arrangement.  There is only a reporting obligation in respect of such individuals where they hold awards that will give rise to UK income tax and/or National Insurance contributions (NICs). 

Dividend equivalents

• If employees do not hold actual shares (for example they have a share option) but you give them the right to receive "dividend equivalents" (broadly, the amount they would have received as dividends had they held shares), the way in which these are reported will depend on the nature of the underlying award and whether they are settled in cash or shares.  HMRC's guidance on reporting dividend equivalents can be found here.

Net settlement

• HMRC has recently updated its guidance on how to report the net settlement of awards. Broadly, net settlement is where a company settles the award partly in cash (to cover the exercise price payable and/or the tax and NICs due).  Previously, it was necessary to complete two lines of information on the annual return to report net settlement. This has been reduced to a single row, but employers must continue to retain records showing they have accounted for income tax and NICs correctly and how this has been recovered from employees. These records should be retained for the current tax year plus 6 years and be produced to HMRC if requested as part of a routine compliance check. 

Further information

You can access all the HMRC templates and guidance here:

Employment related securities: detailed information - GOV.UK