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Government lays foundations for employee ownership

The Government has unveiled further details of its plans to boost employee ownership among UK businesses.

Chancellor George Osborne recently announced the Government’s planned introduction of a new employee share ownership scheme, under which employees would exchange some of their existing employment rights for the right to own shares in the business.

Under the scheme, owner-employees would be offered between £2,000 and £50,000 of shares, free of capital gains tax. However, in return they would give up selected employment rights, including rights relating to unfair dismissal, redundancy, flexible working and time off for training, and would need to give additional notice of a firm date of return from maternity leave.

As part of its plan of action, the Government now intends to work to promote awareness of employee ownership, as well as assessing the viability of setting up an independent Institute for Employee Ownership, developing an ‘off the shelf’ model for an employee-owned business, and examining the tax implications of employee ownership. The Government is also consulting on amending company law in order to reduce the regulatory burden faced by companies when members of staff leave.

Jo Swinson, Minister for Employment Relations, said, ‘Our action plan will boost employee ownership in the UK and help give new impetus to a business model we want to see thriving across the country’.