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- APPRENTICES
- April Bembridge – Chief People Officer, Cooper Parry
- Are You Claiming The Right Amount? Gated
- AUDIT – WHAT OUR CLIENTS SAY
- Audit and Assurance
- AUDIT FOR AIM LISTED COMPANIES
- B CORP
- Bundle and Pricing Options
- BUSINESS SERVICES INSIGHTS
- BUSINESS STRUCTURING
- Business Support And Grants
- Business Tax
- CAPITAL ALLOWANCES
- CAPITAL GAINS TAX
- Careers – Our Roles
- Careers Contact Us
- Careers Trainees FAQs
- Charities
- Construction And Property
- Contact Thank You
- Contact Us
- COOKIE POLICY
- Cooper Parry Book Club
- Cooper Parry Event
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- Corporate Finance
- Corporate Finance – What Our Clients Say
- CORPORATE FINANCE DEALS
- Corporate Finance News & Insights
- Corporate Social Responsibility
- Covid-19 Collaboration-news
- CP Futures
- CP Innovation
- CP INNOVATION – WHAT OUR CLIENTS SAY
- CP INNOVATION FULL PAGE. – DRAFT
- CP Tech 100
- CPERS: COOPER PARRY ENQUIRY RESOLUTION SERVICE
- Creative Tax Reliefs
- CULTURE
- DIVERSITY POLICY
- Early Stage To SME- WHAT OUR CLIENTS SAY
- Ecommerce
- Eddie Latham & PJ Scott – Co-founders, Velocity Commerce
- Education
- EMPLOYMENT TAX
- FAQS
- Financial Reporting
- Find Us
- Flexible ‘Finance Bench’
- Future Events
- Galahad Clark – Founder VivoBarefoot
- GLOBAL TALENT PROGRAMME
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- HEALTHCARE INSIGHTS
- Helena Hills – Founder & CEO, TrueStart
- HIGH GROWTH LOW DOWN
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- Inheritance Tax
- Intellectual Property & Patent Box
- INTERNATIONAL TAX
- Investment Calculator UK
- James Hyde – Founder & CEO, James and James
- Jay Richards & Cat Agostinho – Co-Founders, Imagen
- Justin Harling – CEO, CAE Technology Services
- LANDLORD
- LEGAL STUFF
- Let’s Stop Calling It R&D V2 Gated
- Life at cooper parry
- Lounge Underwear Webcast
- MAKING TAX DIGITAL
- Management Information and Reporting
- MANAGING AGENTS
- Manufacturing Tax and Advisory
- Marketing Thank You
- MID MARKET – WHAT OUR CLIENTS SAY
- Mid-Market
- New Hub CP
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- Operational Systems & Technology
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- Meet the Team Retail
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- Our People – Business Tax
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- Paul Richardson – Executive Chairman, Gymshark
- Paul Turton – CEO, Pact Coffee
- PENSIONS AUDIT
- Personal Tax
- Personal Tax Compliance
- PLACEMENTS
- Preference Centre
- PRIVACY POLICY
- Private Equity Advisory
- PROPERTY AND LANDLORDS
- R&D Capital Allowances
- R&D Newsletter Thank You
- R&D Tax Credits Questionnaire: Are you eligible?
- Raise investment or debt
- Raising Finance
- Read All About It
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- Retail Tax
- Rob Law MBE – Founder, Trunki
- Scale Up & High Growth
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- Service Charge
- Service Test
- SETTING UP BUSINESS IN THE UK
- SHARE INCENTIVES AND REWARD
- Share incentives: Annual Reporting
- SHAREHOLDER TAX ADVICE
- Shaun Doak – CEO, React Group Plc
- Small Business
- SNAPSHOT
- Succession Planning
- Supporting start ups
- SUSTAINABILITY
- Tax – What our clients say
- TAX COMPLIANCE SERVICES
- Tax Services
- TAX SETTLEMENTS AND INVESTIGATIONS
- Tech & High Growth
- Tech & High Growth – What our clients say
- TEN STAGES TO INVESTMENT
- TEN STAGES TO SALE
- Test2
- This Is Us
- Tom and Tina Warner – Co-Founders, Warner’s Distillery
- Transaction Deals
- Transaction Services
- Transaction Services – What Our Clients Say
- TRANSACTION TAX
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Remember when the John Lewis business model of employee ownership was considered unusual and cutting edge?
Well now it’s not just big corporate businesses that are looking to change their ownership structures. More and more people are talking about employee ownership and more specifically Employee Ownership Trusts (EOT’s).
EOT’s are an HMRC approved structure that allows business owners to sell their business to a trust for the benefit of the entire employee base. This can be done at full market value and financed out of future profits of the business or raising 3rd party debt.
THE BENFITS
The reason some business owners consider selling their business to an EOT is because they want to access the tax benefits it can provide, being:
- 0% Capital Gains Tax for exiting shareholders
- Each employee can receive £3,600 as an income tax free bonus each year
For obvious reasons, the above make EOT’s an attractive proposition for business owners, compared to more traditional succession structures such as a management buy-out or 3rd party sale. 0% tax on disposal, simplified sales process (i.e. no external 3rd party) and the ability to leave the business to those that helped build it. It all sounds great.
However, despite what many in the market may advertise, EOT’s aren’t the magic one size fits all solution for everyone. They need to align to the objectives of all stakeholders – shareholders, managers and employees – to be truly the right answer.
A sale to an EOT may be the right option for business owners. Although the attractiveness of 0% tax should not sway business owners away from considering structures that may be a better commercial fit and all possibilities should be explored.
BUYER BEWARE!
There’s a lot more to EOTs, particularly around the governance that needs to be put in place.
EOT legislation is complex. Each case requires detailed planning and a tailored solution drawn up by qualified advisers. Adverse tax and legal consequences can arise if processes aren’t carefully followed – like the loss of the 0% relief! As such, professional advice should always be taken before implementing a sale to an EOT.
Talk to our experts to find out about EOTs or other options that might suit you and your business. Or if you want exclusive access to more insights why not join us at our show-stopping, knowledge-dropping, live and in-person FD events – in Birmingham or the East Midlands You’ll get to hear more about the other ways employers can minimise costs and maximise compliance.
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