WREOC response to the Treasury consultation on employee ownership

Response to Treasury Consultation by Professor Andrew Pendleton on behalf of the White Rose Employee Ownership Centre.

Introduction

We are strongly supportive of the Government’s intention to support the development of employee ownership by

  1. The creation of a CGT relief for owners selling part or all of their company to an Employee Benefits Trust (EBT)
  2. The introduction of income tax and NIC reliefs to enable employees to benefit financially from employee ownership when employee ownership is indirect.

The challenge is to design legislation that provides sufficient impetus for conversions to employee ownership and to enable employees to benefit from this, whilst limiting the potential for abuse.  The legislation needs to be sufficiently flexible to embrace a variety of corporate contexts whilst restricting the capacity of individuals to use the tax reliefs in ways unintended by the legislation.    The comments below are informed by these twin imperatives.