Shares for Rights?

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The Growth and Infrastructure Bill contained provisions around the new, much publicised employee shareholder status.  This was due to come into force in September 2013 but the House of Lords has voted (by 232 to 178) to strike down the provision introducing this concept.

The Bill will now return to the House of Commons for further consideration.  Will the Government accept defeat (binning employee shareholder status), or try to re-introduce the clause? It is rumoured that the Liberal Democrats are against this policy.

Practical implications

Our view is that this scheme is likely to be shelved, given the need for the Government to re-present it to the House of Commons following last week’s vote.  Even if it does survive, our view is that it is not likely to attract widespread usage amongst employers, not least because of the additional work load issuing shares will create on commencement and termination of employment.  They may ultimately become the “play thing” of tax planners and not fulfil the Chancellor’s original intentions when he came up with the idea in Autumn 2012.  We now have to wait a while to see the Government’s response will be.

They may ultimately become the “play thing” of tax planners and not fulfil the Chancellor’s original intentions when he came up with the idea in Autumn 2012.

For further information, help or advice please contact our Employment Team on 0191 211 7777 or email [email protected].