The Autumn Statement sees the Chancellor phasing out the “employee shareholder” regime – initially by removing the tax advantages associated with it; but in due course it is expected to disappear altogether.
This is no great surprise.
We blogged about the scheme when it was introduced in late 2013. You can read our reservations here: http://morrishsolicitors.blogspot.co.uk/2013/09/employee-shareholders.html
Not for the first time in the last few years, dogma has overcome common sense – until the stark weight of reality sets in.
We predicted the scheme would be short-lived, but even in April of 2016 some tinkering had been required.
It turns out, unsurprisingly, that the idea of selling your employment rights was not terribly attractive – save for a few who saw tax advantages associated with it – and it’s those loopholes that were limited in April, and are now being closed as a precursor to abolition of the scheme entire.
Ironic then, that a proposal driven by the ideology that entrepreneurs don’t need rights but will trade them for a business share, ends up being a tax avoidance mechanism for the well off.
We’ve blogged before, too, about governments and their attitude to consultations (i.e. that they don’t tend to listen to the experts – or indeed anyone). A classic example, we think. No-one wanted the ES regime, no-one thought it was needed or desirable or likely workable. A few wasted tax pounds later, and back to square one it is. We know that “experts” don’t seem to be flavour of the month this year, but really?