Can an EOT-owned company pay tax-free bonuses to employees?

Yes. A company controlled by an EOT can pay each employee an annual bonus of up to £3,600 free of income tax. National Insurance Contributions are still payable on the bonus.

Bonuses are not mandatory, and there are specific rules about how they must be awarded across the workforce. They are one of the most visible ways employees feel the benefit of the move to employee ownership.  RM2 can provide you with guidance on your EOT bonus arrangements.