In October 2012 George Osborne announced plans to introduce a new type of employment status: the “employee shareholder”. The proposal is set to be introduced in April 2013 and will enable companies to offer, and in some cases require, employees to enter into a specific contract of employment in which they waive a number of employment rights. In exchange, the employee will receive shares in the employer company worth between £2,000 and £50,000, with any growth in value of the shares being exempt from Capital Gains Tax.
The proposal has attracted criticism from practitioners and commentators from the outset. Shortly after the announcement, the Guardian suggested that the proposal “simply doesn’t add up” and the Telegraph expressed the view that it “helps no one”. The Government’s own response to a condensed consultation process revealed that 92% of the submissions received viewed the proposals in a negative or mixed way. More…