EMI Options: HMRC to Drop Separate Grant Notifications from 2027

On 13 July 2026 HMRC published draft Finance Bill 2026-27 legislation to simplify Enterprise Management Incentives (EMI). For options granted on or after 6 April 2027, companies would no longer need to tell HMRC separately when they grant EMI options. Instead, grant details would be reported through the existing EMI end-of-year return.

The technical consultation on the draft clauses runs until 7 September 2026. Comments go to [email protected] (for the attention of Anne Berriman). Final Finance Bill contents remain subject to decision by the Chancellor — treat the draft as the current policy design, not as enacted law.

Current law sits in Part 7 and Schedule 5 of ITEPA 2003. The draft revises section 527 and Schedule 5 so that a qualifying EMI option is notified through the annual return rather than a separate grant notification. Schedule 5 would also define the termination date of a scheme and allow HMRC to require information or declarations to check EMI conditions.

HMRC’s tax information and impact note estimates about 5,200 small, medium, and scale-up companies granting EMI options would benefit, with continuing administrative savings of around £1.1 million a year across users. Exchequer impact is expected to be negligible. HMRC flags a one-off IT cost in the region of £4 million to support the change.

Operationally, the separate notification would be removed for grants on or after 6 April 2027. The end-of-year return would be updated to require grant details beginning with the 2027 to 2028 tax year return, submitted from 6 April 2028.

Until 6 April 2027, keep following the existing grant-notification process. Do not stop notifying HMRC of grants in 2026/27 on the assumption the draft is already live.

Use the consultation window if you grant EMI options, advise clients, or build share-scheme software: say whether the annual-return data fields will work in practice, and flag any timing gaps between grant date and year-end reporting that could confuse employees or auditors.

Separate EMI admin from day-to-day PAYE and MTD for Income Tax. Directors who personally have self-employment or property income over £50,000 may still face the 7 August 2026 MTD quarterly update deadline in their own name — that is unrelated to company EMI filings.

Share schemes sit beside clean payroll and company books. FinnAccountings helps Ireland and UK limited companies prepare bookkeeping and tax packs with Chartered Accountant insight before you or your ICAEW/ACCA or Chartered Accountant (Ireland) adviser reviews filings. Start a free trial for review-ready drafts — we prepare packs; we do not submit EMI returns, CT600, or PAYE filings to HMRC on your behalf.

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