.png)
.png)
The government’s plans for a third employment status continue to change, with today’s Budget introducing a further tax break.
Workers who sign employee-shareholder contracts will pay no income tax or National Insurance (NI) on the first £2,000 of shares they receive from their employer company, the Treasury announced.
The government’s plans for a third employment status continue to change, with today’s Budget introducing a further tax break.
Workers who sign employee-shareholder contracts will pay no income tax or National Insurance (NI) on the first £2,000 of shares they receive from their employer company, the Treasury announced.
The measure had been expected since the Department of Business, Innovation and Skills reported that a consultation of the new status, as it was originally laid out in October, had uncovered much apprehension about its income tax implications.
In his autumn statement in December, the chancellor, George Osborne, pledged to address the concerns, and at the same time removed the cap of the amount of shares a firm will be able to grant a member of staff.
The latest tax benefit will be in addition to the capital gains exemption on shares worth up to £50,000. In exchange, employee-shareholders will be required to give up some workers’ rights, including those covering unfair dismissal, redundancy, flexible working and time off for training.
Employee-shareholder contracts – scheduled to come into effect on 1 September – were criticised earlier this year by the Law Society as flawed, which called for the plans to be abandoned.
The chancellor has insisted the employment status, which will sit alongside employee and self-employed, will benefit fast-growing businesses by allowing them to create a flexible workforce.
