Since the Employee Ownership Trust (EOT) was introduced, we’ve spoken to hundreds of business owners about how EOTs work. Here are some of the common misconceptions we encounter and have hopefully corrected: 1. I won’t get full value. True, if you want to maximise your day one...

The First Tier Tribunal has ruled in the Esprit Logistics Management Ltd and others v HMRC [2018] case that director loan accounts written off were taxable as employment income of the directors, and subject to PAYE and NIC, rather than taxed as dividends where a...

Employee ownership, and in particular Enterprise Management Incentive schemes (EMI) are at their most popular level ever. This is according to the latest HMRC statistics published in July. Key stats for EMI schemes: Total EMI schemes increased to 10,350 (up 16% on the previous year); Companies...

On 29 June 2018, the Financial Services and Services Markets Act 2000 (Prospectus and Markets in Financial Instruments) Regulations 2018 No 786 were published. These UK Regulations/Statutory Instruments amend the Financial Services and Markets Act 2000 (“FSMA 2000”) for the purposes of implementing the new EU...

Today we received an email from HMRC. Specifically, an email agreeing a valuation of a company for an Enterprise Management Incentive ("EMI")scheme. What’s the big deal? For decades, agreeing valuations with HMRC for employee share schemes has been a grind of hand written forms, heaps...

If you’re running an employee share scheme, it’s obvious that it extends to employees. However, is it always obvious who your employees actually are? If you’re using a tax advantaged share scheme, like the Enterprise Management Incentive Scheme (EMI) or Company Share Option Plan (CSOP), you...

Recently the government issued without fanfare or flourish, an HM Revenue & Customs ("HMRC") Economic Research report entitled “Evaluation of Enterprise Management Incentive scheme”. While I would suggest only economics nerds (of which there are a few at RM2) spend much time digesting it, it...

If you’re running a share plan for employees, you must submit your annual share scheme return on HMRC’s online system by 6 July 2018. If you don’t, fines will likely apply.HMRC are not known for accepting excuses for late filing. Here are some...

A recent case in the high court gives some helpful pointers about decision making by trustees of employee benefit trusts (EBTs). This may be of particular interest to employees who have been appointed as trustees of an EBT or an Employee Ownership Trust (EOT) to...

Sorry, no punchline. But in the last three weeks, we’ve seen two very different companies make the move to employee ownership, demonstrating that the “John Lewis” model can work in any sector. In May, Kinetic plc, specialising in recruitment and payroll services, became employee owned by...

The point of an Enterprise Management Incentive scheme (“EMI”) (or giving share options / equity to employees in general) is not financial: it’s emotional. Specifically, it’s to change an employee’s emotional state to be more favourable to being recruited, retained and motivated. We’re always on...

An often neglected consideration when structuring the financing for an Employee Ownership Trust ("EOT") transaction involves the concept of distributable reserves (“DR”). Simply put, distributable reserves are the accumulated earnings of the business over time, less any dividends paid. They may also be referred to...

Share plans talk in the last few weeks has focused on Enterprise Management Incentive (EMI) options – with relief all round when EU state aid was reconfirmed for this tax advantaged share option plan. The EMI scheme is the best employee share option plan in terms...

Businesses and advisors breathed a collective sigh of relief on 16 May 2018, when the EU commission announced in a press release that Enterprise Management Incentive (EMI) had received EU state aid approval. At the time, no official case note was available, so advisors were left...

One of the questions we get frequently from vendors is what percentage of the company’s shares should be sold to an Employee Ownership Trust (EOT). The answer will vary based upon the company profile and the vendors’ objectives. With only a few exceptions, our clients...