ifs ProShare, the voice of the employee share ownership industry in the UK, has urged the Treasury to safeguard the interests of workers who participate in employee share plans when drawing up a new Capital Gains Tax (CGT) regime as part of their Emergency Budget plans.
The coalition agreement clearly sets out that the Government will, "…seek a detailed agreement on taxing non-business capital gains at rates similar or close to those applied to income." This has the potential to negatively impact the UK employee share ownership industry.
However, ifs ProShare argues that as the Government has also agreed to reintroduce the distinction between business and non-business assets, shares owned by employees should be classed as business assets, as was previously the case. This would recognise the important place that employee share ownership holds in the UK economy and would represent a common sense approach to the issue.
ifs ProShare, whose members include Asda, BP, National Grid, Henderson Global Investors and Diageo recently wrote to Mark Hoban MP, Financial Secretary to the Treasury, setting out members’ concerns about the potential implications for employees.
Julie Richardson, Head of Employee Share Ownership at ifs ProShare said
"Employee Share Ownership is not only a very effective savings tool, it makes a significant contribution to employee productivity and retention and can positively influence workplace relations. These have always been important factors but are especially so in the current economic climate.
Both the Conservatives and Liberal Democrats have supported the concept of Employee Share Ownership in opposition. We are hopeful this will translate into action in Government. The principle of investing in the company you work for is a sound one and we would not like to see this undermined by potentially unintended consequences of CGT changes."
For more information about employee share ownership or ifs ProShare please visit: www.ifsproshare.org
