U.K. Deputy Prime Minister Nick Clegg will say today that the government will look at offering tax breaks for employee-owned firms, which he’ll argue offer a superior model of growth to other companies.
In his March 20 budget, Chancellor of the Exchequer George Osborne announced a capital-gains tax exemption for owners selling a controlling stake in their company to their employees. In a speech in London, Clegg will propose tax relief on bonuses paid through “benefit trusts,” which are set up to own a stake in a company and pass on rewards to staff.
“What we want to encourage is for more owners to sell the business on to those people who know the business inside out, who will go the extra mile, the wider family who have worked to build it up and contribute to its success -- in other words, the employees,” Clegg will say, according to his office.
Clegg, who heads Conservative Prime Minister David Cameron’s Liberal Democrat coalition partners, will make his speech to the Employee Ownership Association. The EOA has been a critic of plans by Osborne, a Conservative, to allow people to give up employment rights in exchange for shares in a company. Those plans suffered a setback last week when they were voted down in the upper House of Lords.
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