Bonus payments up to £3,600 per year can be made to all qualifying employees exempt from income tax (but not NICs).
Tax
An employee owned business is solely owned by its employees and can provide a tax-efficient exit route for founding shareholders as well as facilitating succession and improved performance of the business.
Tax can be a complex area to understand. We have the knowledge and expertise to ensure you’re enjoying the tax breaks you’re due, not risking any potential penalties and can guide you through the labyrinth of complex laws.
Employee Ownership Trusts (EOT) are a government initiative to promote the “John Lewis model”. It involves a special form of trust in which the EOT holds controlling interest in the company on behalf of and for the benefit of the company’s employees so that, in effect, the employees indirectly own the business.
The original shareholders can benefit from relief upon the sale of their shares to the EOT incurring Capital Gains Tax (‘CGT’) on 50% of the consideration.
Bonus payments up to £3,600 per year can be made to all qualifying employees exempt from income tax (but not NICs).
No tax liabilities are incurred on the employees as the shares are held by the trust on behalf of the employees.
Due to the complex legislation regarding EOTs, a specialist advisor was essential. As our business was a franchise there were additional complications… Hazlewoods were instrumental in clearing the path with HMRC.”
