Employee Shareholding Vehicle Rejected

The government will not proceed with plans for a new employee shareholding vehicle, it has been announced.

The decision follows a summer consultation, which was based on a 2013 proposal by the Office for Tax Simplification with the aim of making it easier for companies to manage employee share arrangements and create a market for workers' shares.

Responses indicated that such a measure would have to take account of capital gains tax, and rules covering loans to participator and disguised remuneration, leading the government to predict difficulties in suiting tax advisers and businesses.

Necessary safeguards would have significantly reduce the likelihood of the vehicle being used - and the responses, notably from firms and their representative organisations, did not indicate significant demand for a new employee shareholding vehicle.

Agents were sceptical about whether the proposed measure would significantly reduce the need for specialist tax advice or increase employee share ownership