Member Article

Consulting on a consultation: Employers don’t hold your breath!

More than 18 months ago, the Office of Tax Simplification published its final report of its review of share schemes. Its third recommendation was ‘the introduction of a simpler vehicle to enable companies to manage their employee share arrangements and create a market for employees’ shares’.

It had come to the conclusion that the anti-avoidance rules that apply to employee benefit trusts were making it unnecessarily difficult for employers who needed to create a market for their shares in connection with employee share schemes. With difficulty comes cost as employers need to take professional advice to avoid unexpected tax and NICs charges.

The OTS therefore suggested that a vehicle with many of the characteristics of an EBT, but which cannot be used for other tax planning activity, should be created. In other words, a simple, straightforward, holding pen for a private company’s shares.

And the result?

29 questions posed in a discussion paper issued by HMRC. Not draft legislative clauses, not a consultation document, but simply a discussion paper.

How slowly the wheels of change turn when the issue concerns costs for the employer rather than income for central government.

This was posted in Bdaily's Members' News section by Baker Tilly .