The BIS has published its response to the employee-owner status consultation, which confirms that even though there is little interest in the proposal, the Government intends to go ahead with implementation, which will include renaming the status to employee shareholder.
In all, 209 responses were received to the consultation and only a very small number welcomed the scheme and suggested they would be interested in taking it up. Despite 92% of consultation respondents viewing the plans in a negative or mixed way, the Government intends to implement the proposal, with some minor changes. In response to issues highlighted in the consultation, the Government intends to provide further clarity, consistency, and flexibility, both through guidance for individuals and businesses and through the legislation, which underpins the new status. Changes include the following:
•Amendments to clarify the nature of the shares awarded, remove specific risks of liability on the employee owner, and ensure that shares are issued free of charge to them.
•Enabling the Secretary of State to increase the minimum share value of £2,000.
•Removing the upper threshold of £50,000 – to allow businesses to offer more shares under the scheme, but not raising the £50,000 exemption from Capital Gains Tax.
•Changing the notice period for return from additional paternity leave to 16 weeks so it is consistent with change in the notice period for return from maternity and adoption leave.
•Allowing non UK-registered companies to benefit from the status.
•Allowing shares to be issued by both the employing company and its parent company to ensure the scheme is sufficiently flexible to encourage widespread appeal.
In addition, the Government has reflected on the employee owner name, and consider it should be changed to better describe the status, and intend to re-name it ‘employee shareholder’.
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