The Government has announced plans for a new type of employment contract called an ‘employee-owner-contract. Parliament will need to pass legislation to bring about this change which is planned for April 2013.
What does this mean?
Under the proposals new employee-owners will be able to exchange some of their employment rights for shares worth between £2,000 and £50,000 in the business they work for. Any gains on the shares will be exempt from capital gains tax.
What should employers do?
Start-up and growth companies, in particular, may benefit from the Government plans, although at this stage it is not anticipated that the take up of such contracts will be wide spread. Employers who are interested should follow news of legislative developments.