Government shares for rights plan flops, says Financial Times
Government "shares for rights" plan flops, says Financial Times
"Only a handful of companies have inquired" about George Osborne’s proposals for new employee-shareholder contracts, the so called "share for rights" plan, according to todays' Financial Times.
The business department told the Financial Times that it had received four inquiries, while HMRC had two requests for information.
Background to “shares for rights” scheme
- Speaking at the Conservative Party conference on 8 October 2012, the Chancellor of the Exchequer, George Osborne announced plans for a new kind of employment contract called an employee-shareholder.
- New employee-shareholders will exchange some of their UK employment rights for rights of ownership in the form of shares in the business they work for, any gains on which will be exempt from capital gains tax.
- Under the new type of contract, employees will be given between £2,000 and £50,000 of shares that are exempt from capital gains tax.
- In exchange, they will give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual eight.
- The plan received little support from employers in a consultation exercise. A report issued on 3 December 2012 by the Department for Business, Innovation and Skills (BIS) said: “a very small number of responses welcomed the scheme and suggested they would be interested in taking it up”.
- The scheme came into law in April 2013.