Employment‑Related Securities (ERS): Don’t miss the 6 July reporting deadline

If your business has issued shares, share options or other securities to employees or directors during the last tax year, an important HMRC deadline is approaching. 

All Employment‑Related Securities (ERS) annual returns must be filed with HMRC by 6 July following the end of the tax year. Missing this deadline can result in automatic penalties, even where no tax is due.

What are employment‑related securities?

Employment‑Related Securities are broadly shares or other securities acquired by reason of employment. This includes both UK and non‑UK arrangements and applies to employees and directors alike. 

ERS can arise through: 

• Employee share schemes (EMI, CSOP, SIP, SAYE) 
• Non‑tax‑advantaged share plans 
• One‑off share awards or option grants 
• Growth shares or alphabet shares 
• Carried interest and co‑investment arrangements 
• Shares issued as part of a corporate transaction 

Even where no formal share scheme exists, one‑off or ad hoc equity awards may still be reportable.

Who needs to file?

You must submit an ERS return if, during the tax year: 

• Your company operated any share plan or arrangement
• Shares, options or securities were issued to employees or directors
• Awards were made to UK resident or UK‑working individuals
• Options were granted, exercised, varied or lapsed

Importantly, a return is still required even if there has been no activity during the year. HMRC expects a nil return for all registered schemes until they are formally closed. 

Key Deadline: 6 July

By 6 July, companies must: 

• Be registered for HMRC’s ERS online service 
• Register each share scheme or arrangement 
• Submit their ERS annual return (or nil return) 
• Notify HMRC of any EMI option grants made during the tax year 

ERS returns are submitted online via HMRC’s ERS service.

Registration and access to the service can take time, particularly where an activation code is required, so early preparation is strongly advised.

What happens if you miss the deadline?

HMRC imposes automatic penalties for late or missing ERS returns, including: 

• An initial £100 penalty for late submission 
• Additional penalties if the return remains outstanding 
• Potential daily penalties for prolonged delays 

For EMI schemes, failing to meet reporting deadlines can also result in the loss of valuable tax advantages for both the company and employees. 

What should you do now?

To stay compliant: 

• Review whether any ERS‑reportable events occurred during the tax year 
• Check that all relevant schemes are registered with HMRC 
• Confirm whether nil returns are required for dormant schemes 
• Prepare and submit required ERS returns well before 6 July 

How we can help

ERS reporting can be complex, particularly for growing businesses or those with multiple share arrangements. We can help you: 

• Identify whether ERS reporting applies to your business 
• Register schemes and prepare HMRC‑compliant returns 
• Ensure deadlines are met and penalties avoided 

If you would like help reviewing your ERS obligations or preparing your submission, please get in touch with your usual contact.