From your lips to God’s ears – EOT consultation launched

Okay, maybe not those ears, but the ears of HM Treasury and HM Revenue & Customs, at least.

There are currently two real chances to provide feedback to government on how employee share ownership plans are working for your business and your employees. 

Consultation on EOTs

Employee Ownership Trusts (EOTs) are an increasingly popular way for business owners to transfer share ownership to all employees in the company.  Nearly ten years after EOTs were introduced, HMRC are now looking to ensure that the tax reliefs associated with EOTs meet the policy objectives.  Those include encouraging the growth of employee ownership as a viable and mainstream business model. 

The consultation covers a variety of matters including trustee selection, trustee tax residency, and changes to the rules on the tax-free bonus payment that can be made by EOT controlled companies.  There is also the opportunity to feed back to HMRC any other opinions you may have about improving EOTs.

The deadline for responses is 25 September 2023.

Call for Evidence for all employee share plans

Already announced, but still live, is the Treasury’s Call for Evidence on the Share Incentive Plan and the Save As You Earn/SAYE share option scheme.  Treasury wants to hear your views on how these plans are working and how they might be simplified and improved.  There’s particular interest in how they might work better for lower earners.

The more companies respond, the more Treasury is likely to listen.  If you have an opinion on how these plans might provide stronger and more valuable incentives for your employees, please take a look at the on-line questionnaire. 

The closing date is 25 August 2023.

How to respond

RM2 will be responding to both these consultations, as will other specialist advisers, as well as the industry body, the Employee Ownership Association. 

If you have any opinions or suggestions for either of the consultations but prefer not to respond directly, we’d be happy to speak to you and include your views in our formal responses.  To arrange a call, please contact us on enquiries@rm2.co.uk.