Autumn Statement 2014: tax recommendations

Posted by RM2 at 15:51 on 3 Dec 2014


Mr Osborne said during his Autumn Statement that the government would be accepting “almost all of the recommendations” put forward by the Office of Tax Simplification.

So it’s really disappointing to read that the government has decided not to proceed with the concept of the “marketable security” and the “new employee shareholding vehicle”.

The marketable security might have removed the so-called dry tax charge that arises when employees acquire shares in a private company, but then – because of the lack of a ready market – cannot sell some of those shares to cover off any tax charge that might arise.

The new employee shareholding vehicle, similarly, might have been a really helpful way for companies to establish a “safe harbour” Employee Benefit Trust (EBT) – with the intention of broadening share ownership for their employees without the many complications associated with setting up EBTs.

In addition, the government has also confirmed that there will be no changes on the loans to participators tax charge – another hurdle for close companies introducing share schemes.

Only the other day, Patrick Lewis of John Lewis Partnership remarked that setting up employee owned companies was too complex. It looks like the OTS’s attempts to help smooth the way have been severely curtailed.