Employee Ownership Trusts Q&A

We hosted our Employee Ownership Trust webinar alongside Chris Sellars and Matt Milnes at Mackenzie Spencer – a very positive, lively and informative event which attracted a large audience of business leaders from across the region.

May 20, 2021
May 20, 2021
CFO News Article

Our panel had been carefully selected to bring a broad perspective on the subject of EOTs:

 Nik Pratap hosted a lively Q&A session which really got to the bottom of the attraction of EOTs and why so many have been so successful.

 Some of the main benefits of EOTs from the discussion:

  • Selling to an EOT has significant tax benefits for vendors (and employees) – cannot be overlooked and often represents the starting point of a conversation for an exit to an EOT. Savings in tax are achieved in both CGT savings and annual allowances of £3,600 for the employees.  
  • Huge potential for increasing staff engagement, loyalty and productivity.
  • Positive changes to recruitment strategies – higher standards for values and a stronger pull of benefit rewards.
  • Strong benefits with suppliers and customers as they value speaking with the co-owners of the business.
  • Easier transition from the current owners to the new than with MBO processes.

 Some of the main considerations:

  • Communication across the business becomes even more critical.
  • Corporate Governance and processes for decision-making agreed at the outset. Trusts created to represent the co-owners and represented in decisions. "Ownership" does not necessarily mean "leadership" though.
  • Find the right bank. Lender understanding and confidence in EOTs is increasing but is not universally mature at present.

If you are interested in discussing Employee Ownership in more detail, or if you have any further questions or comments, please contact Nik Pratap or Joe Ingham and they can point you in the right direction.



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