Kirkpatrick & Hopes - Succession Planning Accountants

Call us on: 0118 923 5800
Email us:

Employee Ownership pays dividends

Sam Dowling, Director of Communications, Employee Ownership Association

The Employee Ownership Association is the voice of co-owned business in the UK. It’s a network of more than 100 companies with significant employee ownership and is worth over £30 billion a year.

We have been working closely with Government and politicians of all parties for some time – making the case for equitable treatment for employee-owned firms – and were delighted to hear the Chancellor announce in his Budget statement to Parliament that the Treasury will be conducting a Review to identify what they can do to encourage employee ownership in the UK.  See my summary of the Budget here.

Employee ownership drives medium-term growth and long-term sustainability. Lower workplace absenteeism and sickness, and higher employee well-being and engagement in the workplace, mean the Chancellor’s Review of tax treatment for employee-owned businesses could provide a huge boost to companies in the UK when it concludes in the autumn.

We also know that employee ownership can be the solution to the problem of succession in small and family-owned businesses (as outlined in the recent report on succession produced by the Wales Cooperative Centre, which you can view here). But not enough business owners are aware that it is an option. And for those who are interested, it’s often a real effort to find the right advice against the received wisdom that business succession is about selling to the highest bidder.

We welcome the Chancellor’s Review, and the changes announced on Budget Day, including the doubling of the Enterprise Management Incentive (EMI) scheme individual grant limit from £120,000 to £250,000, and the extension of Entrepreneurs’ Relief to gains on shares acquired through EMI. However, we are focusing our attention over the coming months on campaigning for a more level playing field for employee owners.

We want revised thresholds for free and partnership shares held in an SIP, an ‘employee ownership bonus’ modelled on the old performance-related pay (PRP) scheme but with an eye to preventing the abuse that caused PRP schemes to be reined in, and the provision of Entrepreneurs’ Relief to employees in all private companies, not only those with the largest stake.

Politicians agree that employee ownership is good for the economy, the community, business and staff. We are calling on the Government to take bold action to encourage more owners to sell their business to employees, and to a healthier and happier economy. Equity, in all senses, for employees.

If you would like to know about the Employee Ownership Association, visit Or contact me, Sam Dowling, by phone on 020 7922 7762 or by email.

The Independent Review of Employee Ownership is being led by Graeme Nuttall on behalf of BIS, and encourages Members and interested parties to share their views before the end of April:

Leave a Reply