The UK government has announced the abolition of the tax benefits of employee shareholder status in today’s Autumn Statement. The change applies to shares issued on or after 1 December 2016. Since there has to be a minimum 7 clear days notice between the individual employee being advised on the implications of employee shareholder status … Continue Reading
A couple of items relevant to employee shareholder status shares (ESSs) have appeared this week. First, HMRC reported in its latest Employment-Related Securities Bulletin that the Department for Business Innovation and Skills (BIS) has confirmed that already-issued shares – for example, those held by a shareholder or an employee benefit trust – can be used … Continue Reading
Although it is dated June 2014, BIS has just published the Government’s response to the consultation last November asking whether it would help the cause of employee ownership were the limit on the life of an employee benefit trust (currently 80 years) to be removed. There weren’t many responses (28) and no strong feeling/evidence either way, … Continue Reading
Today’s Budget was notable for the absence of announcements relating to employee share plans. So, despite the calls for it to be abolished, employee shareholder status lives to fight another day. This is perhaps not surprising given the enthusiasm George Osborne showed for the concept when it was first announced. As we have commented, ESS … Continue Reading
On 1 September 2013, employee shareholder status was introduced, bringing with it a favourable tax regime for UK employees willing to forfeit some of their employment rights in return for free shares in their employer. In January 2012 Deputy Prime Minister, Nick Clegg urged businesses to offer shares to their employees, saying it would improve … Continue Reading
The minutes of the last meeting of HMRC’s Employment Related Securities Forum, attended by representatives of BIS, companies and various bodies involved in tax and employee shares, were recently published and make interesting reading. The largest section is devoted to employee shareholder (ES) shares – the so-called “shares for rights”. Points raised were: Feedback: BIS … Continue Reading
There are several critical requirements that must be satisfied to ensure that employee shareholder status is obtained, and thereby the tax breaks for the employee shareholder and fewer employment rights for the employer to worry about. One of these essentials is that the shares given to the employee are worth at least £2,000 at the … Continue Reading
As part of deputy prime minister Nick Clegg’s “John Lewis economy” project, last autumn the UK Government consulted on changes to the share buy-back legislation to enable companies more easily to increase employee ownership. View the BIS report on these changes. As a result, regulations have now come into force that will amend the Companies … Continue Reading
The UK Government appears to be firmly committed to its idea of employee shareholders – employees who give up their employment rights in exchange for tax-free shares. Is this, as some have suggested, a half-baked plan that is doomed to fail or should companies and employees grab the Chancellor’s gift horse (just don’t look too … Continue Reading
