Leading companies pressure Government to end tax discrimination

leading employee-owned firms, including high street retailer the John Lewis
Partnership, have joined with mutuals and co-operatives to press the Government
to end tax discrimination against their employees.

companies, which employ over 200,000 people in the UK, are unable to offer
employees the full range of tax-free benefits available to employees of
conventional companies limited by shares.

Ownership, the independent body, which researches and promotes employee
ownership, has set up a taskforce to work out the best way to tackle the issue.

Duncan Michael, of the international engineering group Arup, who leads the
taskforce said, "We are seeking equitable treatment in the labour market.
We are determined to ensure our Labour government recognises the huge potential
for efficient wealth creation we represent and ends this accidental
discrimination against us."

taskforce, which includes leading employee ownership lawyers, is working on
creative solutions to enable employee trust owned companies, mutuals and co-ops
to use the provisions of the All Employee Share Ownership Plan (AESOP).

shares, if approved by the Inland Revenue, could solve the problem. But initial
investigations suggest that the law will need to be changed. All of these
enterprises anticipate stiff competition in the labour market for skills to
remain viable. This creates a strong case for changing the law.

were introduced by the Government in the Finance Act 2000 to align the
interests of employees with those of their employers through tax efficient
company shareholdings.

government has recognised that its ambitions to include all employees cannot be
met through current legislation.

scheme is expected to be launched later this month under a new name. The work
of the Job Ownership Special Share Taskforce is expected to be reflected in a
Private Members’ Bill on Employee Share Schemes to be published before

By Ben Willmott

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