What a year 2019 has been for share schemes and EOT transactions

Posted by RM2 at 09:59 on 11 Dec 2019

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The year in review:


Another great year for employee ownership as Employee Ownership Trusts started moving into the mainstream. For RM2, our biggest news was that we joined the increasing number of companies that are owned by their employees!


January: January is trusts and estates tax returns season. HMRC have changed the rules so you don’t usually need to file a return for employee trusts unless there’s been taxable activity, so for lots of EOTs there’s no longer a requirement for this to be done. This may change next year, though … watch this space.


February: News on the street is that HMRC Shares & Assets Valuation are starting to query some EMI valuation submissions, particularly where there is investment in the business. This is increasingly a concern for start ups with investors buying at “hope value” but where the company is yet to make any profits (and indeed may not do for some years). To date, RM2 hasn’t received queries but expect closer scrutiny in the future.


March: The ESOP Centre’s well-attended British Iles Symposium included some “frank and open” discussions with our colleague Robin Hartley about Granted, our online EMI offering for smaller companies. We love a heated debate!


April: Happy news for RM2 as on our 25th Birthday we became 100% employee owned. Deb Oxley OBE, chief executive of the Employee Ownership Association (EOA), said: “We’re delighted to see RM2 become part of this fast growing sector of EOT-owned businesses – a succession plan that will root jobs and the businesses in its region for the longer term. RM2 has long been a supporter of EOA and there is no better advertisement for the cause than to have one of our leading advisers adopt this structure.”


May: A contender for the “hottest” employee owned company of 2019 when Richer Sounds transition to employee ownership. https://employeeownership.co.uk/news/does-richer-sounds-mark-the-tipping-point-for-employee-ownership/


June: RM2 does the research for the Employee Ownership Top 50, a list of the largest 50 private employee-owned companies in the UK which has been prepared annually since 2014. RM2 publishes the list in a partnership with EOA. Lots of interesting facts and figures – perhaps the best one, given the current economic situation, is that mean increase in productivity, defined as value added per employee, was 7.7% on a like-for-like basis. Not bad.


HMRC published their annual share schemes statistics. The numbers of companies offering EMI option arrangements in particular increased to over 4,000, demonstrating the ongoing popularity of this tax advantaged option scheme.


July: All of our share plan annual returns were filed well ahead of the filing deadline (over 175 returns filed). Elsewhere, companies struggling with the DIY approach to filing returns incurred large and escalating fines.


August: Summertime, and the living is easy. But we did retain our ISO 9001:2015 accreditation in quality management and system processes which made us happy that we’re doing things right!


September: RM2 sponsors Equity for All, published by Ownership at Work and written by our very own Nigel Mason, setting out a radical plan to encourage wider share ownership while encouraging economic growth


October: The EOA continues its sterling work by calling on government to adopt a national strategy for employee ownership. Sadly, government is generally too busy tying itself in knots over other matters to come up with anything specific. ProShare’s annual conference is as big and bright as ever!


November: The EOA Annual conference attracts over 750 attendees – the biggest one yet! RM2 were there, with free chocolates, and Shaun the Sheep made a guest appearance for employee owned Aardman Animations. A great time was had by all.


December: No mention of the B word this year – we’re all fed up with it. This month it’s all about the election. Labour has some controversial/interesting (delete as appropriate) ideas about employee ownership in its manifesto – but that’s definitely a wait and see ….


Who knows what 2020 will bring? But whatever happens we thank you for your interest in 2019, and look forward to helping you next year with your share plan and employee ownership requirements.


Contact us on 0208 949 5522 or email enquiries@rm2.co.uk.