In 2014 UK professional journals published more articles on employee ownership (“EO”) than in any previous year. This is tremendous step forward in raising awareness of EO. A key idea in the Nuttall Review was that regulatory change would encourage more publicity for EO and this has happened. In 2013, changes to the Companies Act rules on share buy-backs and treasury shares prompted articles in journals such as Company Secretary’s Review. The introduction of the new tax exemptions for employee-ownership trusts (“EOTs”) in the Finance Act 2014 has prompted most of this year’s articles. Raising awareness of EO was one of the Government’s reasons for introducing these new tax exemptions. As HM Treasury explained in July 2013 “Following the findings of the Nuttall Review and in order to support this sector, the Government has decided to introduce … tax reliefs to encourage, promote and support indirect EO structures” and more explicitly “these tax reliefs will promote awareness of the sector and increase the attractiveness of indirect EO structures for businesses which might be considering converting“.
The following is a selection of articles on EO from 2014:
Employee Ownership: One Year On (Company Secretary’s Review, 15 January 2014) – “I have every expectation that when we look back at 2013 we will recognise it as having laid the foundations for a thriving and growing employee ownership sector in the UK. (Jo Swinson, Minister for Employment Relations and Consumer Affairs). Graeme Nuttall and Jennifer Martin from Fieldfisher explain more…”.
One minute with Graeme Nuttall, Partner, Field Fisher Waterhouse LLP (Tax Journal, 7 March 2014)
The life changing power of employee ownership (HSBC Corporate World, Spring 2014) – “Why would you want your employees, in Nick Clegg’s words, to own “a big chunk” of your company? The answer is simple – for many companies, employee ownership improves business performance, economic resilience, employee commitment and engagement. EO is a distinctive business model, a different perspective. And for some companies this is life-changing…”
The employee ownership business model (Tax Journal, 13 June 2014) – “Conventional approaches to the use of employee share plans need revisiting. In addition to understanding how to get shares tax efficiently into the ownership of individual employees, it is now important to understand the wider concept of EO, and especially the idea that a company may be owned by the trustee of an employee trust on behalf of all its employees…”
Securing the succession (Taxation, 24 July 2014) – “Everyone dealing with private companies should be familiar with employee-ownership trusts, especially as a business succession solution…”.
Neat – Graeme Nuttall OBE sees employee ownership trusts as the perfect succession solution (Trusts and Estates Law & Tax Journal, September 2014) – “Too many owner managers have overlooked employee ownership as a business succession solution. New tax exemptions should ensure that the indirect employee ownership business model achieves the recognition it deserves: one that provides a neat exit that is good for a business; good for employees and good for the UK economy…”
The employee ownership business model is incredibly welcome news – Expert Guide (Corporate LiveWire, September 2014) – “Read all about it “The UK Government endorses tax free buy-outs”. EO is finally getting the headlines it deserves. Tax exemptions introduced in the UK Finance Act 2014 are encouraging EOT buy-outs and this successful and versatile UK business model is attracting momentum internationally…”.
New Vehicle for Employee Shares (Company Secretary’s Review, 24 September 2014) – “The Government continues to demonstrate its support for employee share ownership in all its forms with the publication on 17 July 2014 of an open consultation seeking views on the introduction of a new employee shareholding vehicle…”
Tried and tested – Graeme Nuttall explains how employee ownership trusts can produce better business outcomes (Tax Adviser, October 2014) – “EOTs provide a refreshingly different ownership model for private companies. Anyone who focuses on the tax savings achievable through the new EOT tax exemptions is missing the big picture: EO can produce better business outcomes as well as a great place to work…”.
New tax exemptions promote employee ownership (Tax Journal, 13 December 2014) Graeme Nuttall OBE and Jennifer Martin explore the conditions for payment of income tax free bonuses by companies controlled by employee-ownership trusts.