The government is to conduct an internal review to examine the role of employee share ownership in supporting growth and examine options to remove barriers, including tax barriers, to its wider take-up.
As announced by Chancellor George Osborne in the 2012 Budget report, the review will also consider the findings of the work on employee ownership being conducted by the Office of Tax Simplification (OTS), which is due to report in summer 2012, and will conclude ahead of the Autumn Statement 2012.
Mark Quinn, a partner in Mercer’s human capital business, said: “Employee ownership is integral in providing an engaged and productive workforce so we will monitor developments in this area carefully.”
Malcolm Hurlston, chairman of the Employee Share Ownership Plan (Esop) Centre, added: “We are giving our support to the employee ownership and believe, with a few technical changes, it could be used by many more companies.”
The government will also more than double the individual grant limit on enterprise management incentive (EMI) schemes, from £120,000 to £250,000, to comment at the earliest opportunity following state aid approval and provide enhanced guidance to support start-ups.
The Budget also confirmed that entrepreneur’s relief will be extended to gains on shares acquired through EMI, and the government will consult on extending the scheme to academics employed by a qualifying company, from April 2013, subject to state aid approval.
“EMI is the jewel in the crown of our share scheme legislation and has rightly won praise from the European Union as a model for other countries to follow,” said Hurlston. “It allows employees of small and medium enterprises (SMEs) to share in the growth of their business.
“We hope that the limit for the total value of all options granted at one time for any one company will be raised from £3 million alongside this announcement to allow more employees to benefit.”
Read more articles from the 2012 Budget report