Employment-Related Securities
Compliance-focused support for share schemes, EMI options, and ERS reporting
Employment-related securities (ERS) cover a wide range of tax reporting requirements when shares or share options are awarded to employees or directors. Whether you run a growing business issuing equity for the first time, or a more established company managing ongoing share plans, it is vital to comply with the HMRC rules governing securities.
At My Tax Consultants, we help businesses stay fully compliant with ERS requirements—handling everything from initial scheme design support to annual ERS returns and PAYE implications. We assist companies in avoiding penalties, reducing risks, and applying the correct tax treatments.
What Are Employment-Related Securities?
Employment-related securities refer to shares or options provided to employees or directors as part of their employment or reward. These may include:
- Share incentives (free or discounted shares)
- Restricted stock units (RSUs)
- Growth shares
- Enterprise Management Incentives (EMI)
- Company Share Option Plans (CSOPs)
- Unapproved share schemes
- Share acquisitions linked to employment
Any such awards must be reported to HMRC, and in most cases, there are specific tax implications. Failing to account for these properly can trigger tax liabilities and fines.
Our ERS Services
Our ERS services include:
Share Scheme Implementation
We work with your legal and HR teams to support the correct setup of employee share schemes. This includes EMI schemes, growth shares, and CSOPs. We ensure all conditions required for tax-advantaged treatment are met and documented from the outset.
EMI and CSOP Compliance
Enterprise Management Incentives (EMI) are a popular share option scheme for qualifying UK businesses. We assist with:
- EMI notification filings to HMRC
- Valuation support
- Ongoing compliance and adjustments
- Exit event tax treatment
- Managing CSOP criteria and limits
Annual ERS Returns
Every year, employers must submit Employment Related Securities (ERS) returns to HMRC, even if no new awards were made. We prepare and file:
- EMI40 returns for EMI schemes
- Other ERS returns (including for one-off share issues or growth shares)
- Nil returns where required
Late or incorrect ERS returns may attract penalties from HMRC. We help you avoid errors and meet all filing deadlines.
Share Valuation and PAYE Advice
When shares or options are awarded at a discount or without restrictions, there may be an immediate PAYE and National Insurance liability. We help assess:
- Taxable value at award or exercise
- Deductibility for Corporation Tax
- NIC position for both employers and employees
- Share valuation support to reduce exposure
Why Employment-Related Securities Matter
Incentivising employees with shares can be a powerful tool, but it introduces specific tax reporting and legal responsibilities. HMRC regularly checks share schemes for compliance, particularly where tax reliefs are being claimed under EMI or CSOPs.
Some companies are also unaware that ad-hoc share awards, bonuses in shares, or transfers between shareholders and employees can trigger ERS reporting requirements. These can include:
- Transfers from founders to employees
- Gifts of shares made by third parties
- Share options exercised at undervalue
- Shares with employment conditions attached
All of these may count as employment-related securities, and therefore require correct reporting and PAYE treatment.
Common Errors We Help Avoid
- Missing ERS reporting deadlines
- Failing to register a share scheme with HMRC
- Reporting incorrect valuations
- Overlooking NIC liabilities on option exercises
- Not updating HMRC after scheme closure or business changes
Our goal is to keep your reporting accurate, timely, and aligned with HMRC expectations at all times.
Who Needs This Service?
We support:
- Start-ups issuing shares as part of early-stage hiring
- Scale-ups implementing EMI or growth share schemes
- SMEs offering equity to key personnel
- Owner-managed businesses dealing with succession or restructuring
- UK subsidiaries of overseas firms issuing share options
Get Support from My Tax Consultants
Whether you’re awarding your first employee share options or submitting your fifth annual ERS return, My Tax Consultants provides detailed, reliable support at every stage. From EMI notification to valuation and PAYE treatment, we help you stay compliant and avoid costly errors.
Contact My Tax Consultants today to get expert advice on employment-related securities and book your ERS compliance review.
