The Benefits of the Employee Ownership Model.

We are delighted that one of our long-standing clients has recently switched to an employee ownership model. You can read the full article here.

Not familiar with the employee ownership model? Well, employee ownership is the model in which the share capital of a business is partly or entirely owned by its workforce.

Benefits for Business.

Many business owners consider themselves a custodian of the business for the next generation and that there is no better way to exercise that role than to implement some form of employee ownership.

Because they are co-owners, staff in employee owned businesses tend to be more entrepreneurial and committed to the company and its success.

Because they are run in an open way, employee owned businesses tend to have a strong commitment to corporate social responsibility and involvement with the communities they operate in.

Benefits for the Owners who are moving to the Employee Ownership Model.

The consideration for the sale of the shares to the Employee Ownership Trust (“EOT”) are exempt from Capital Gains Tax – that’s right, forget 10% entrepreneurs relief – this is 0% tax!

In addition to the capital gains tax relief, the disposal of the shares into the EOT will be exempt from inheritance tax charges.

Benefits for the Employees.

A financial benefit for the employees is the ability to pay tax free bonuses to employees up to £3,600pa

Benefits for The Economy.

Successive Governments have promoted employee ownership because they recognise its potential contribution to the economy.

Independent research suggests that a combination of shared ownership and employee participation delivers superior business performance.

The sector is growing because employee ownership is proving to be a durable, successful business model that’s extremely well suited to the challenges of 21st century management.


If you would like to find out more detail about the employee ownership model, refer to these useful guides prepared by the Employee Ownership Association.

Employee Ownership – How to get started.

Guide to structuring Employee Ownership.

If you would like to discuss how the employee ownership model could possibly be the solution you were looking for, contact Andrew McDaid by email or telephone 01246 274121.