EOA CEO Delighted at Increased Support for Employee Owners in #AS2013
Responding to today’s Autumn Statement, EOA Chief Executive Iain Hasdell said:
“Today’s confirmation of new tax incentives for employee ownership, and the announcement of an extra £25m funding for them, taking the figure to £75m each year from next April, is very welcome news. The Employee Ownership Association has been calling for these measures for some time now and our Members are pleased to see that they will now be implemented and properly funded.
“This Autumn Statement marks another key step towards our target of 10% of GDP being delivered by employee owned businesses by 2020, a target that has been widely endorsed, including by some in Government. These measures will help to create more of the higher productivity and long term investments that employee ownership delivers in every sector of the economy.”
The EOA welcomes the Chancellor’s support within today’s Autumn Statement, allocating increased resource to employee ownership in recognition of its important role as part of the UKs growth agenda. This is a valuable endorsement of a part of the economy that contributes more than £30bn to UK GDP each year.
The package of incentives to promote employee ownership and aid businesses in their transition to employee ownership are a result of the recent Treasury Review into employee ownership, a Review that the EOA successfully pushed for and to which many of our members made representations.
Welcome measures for employee owned businesses in #AS2013 include:
- from April 2014, disposals of shares that result in a controlling interest in a company being held by an employee ownership trust used as an indirect employee ownership structure will be relieved from CGT;
- transfers of shares and other assets to employee ownership trusts will be exempt from inheritance tax (IHT) (subject to meeting certain conditions);
- from October 2014, bonus payments made to employees of indirectly employee-owned companies which are controlled by an employee ownership trust will be exempt from income tax up to a cap of £3,600 per annum;
- we welcome the announcement of an increase in the maximum annual value of shares that an employee can acquire with tax advantages under the Share Incentive Plans to £3,600 a year for ‘free’ shares and to £1,800 a year for ‘partnership’ shares;
- and the Save As Your Earn savings contribution limit will be doubled from £250 to £500 – the first increase for these schemes in over a decade.
The EOA has been campaigning for increased support for strong companies which can provide great products and services over the long term. Employee owned companies are very much part of this long term agenda now, but could and should play an even bigger role.
Employee ownership contributes more than £30bn to UK GDP each year. The economic benefits of employee ownership in terms of productivity, innovation and the wellbeing of the workforce are incontestable. Employee ownership, with its very high levels of productivity and employee engagement, offers massive potential for the UK to get to grips with its alarming productivity gap.
The detailed papers for the Autumn Statement can be found here.