From City AM:
GOVERNMENT yesterday outlined plans for £50m of tax relief perks to help boost the number of venture capitalists who make money by allowing employees to temporarily enfranchise themselves.
The Treasury said it would introduce a capital gains tax relief on any controlling interest sold on into an indirect employee ownership business model - preferably one with lots of trustees, lawyers and accountants - in a bid to enable private equity to offload their stakes - the bulk of which is derived from the continuing efforts of whoever happens to be an employee at the time - to whoever happens to be an employee at the time.
It is also proposed that workers should be exempt from income tax and national insurance contributions on bonuses - which will enable the employing company to pay smaller gross bonuses than otherwise, which in turn will make them appear more profitable and boost the price which employees are willing to pay for the right to exploit their own successors - if they work for a company operating under an employee-owned model.
The proposals follow on from a Treasury pledge from March's Budget to provide £50m a year to support the extraction of more wealth from current and all future employees using employee ownership "trickle up" structures.
"Employee ownership is of no particular benefit to the wider economy, or else we would see more of it. Look at Associated Dairies, for Christ's sake. Starts off as a farmer's co-operative and now its a subsidiary of bloody Wal-Mart. Even the kibbutzim are being privately appropriated and sold off," chief secretary to the Treasury Danny Alexander said in a statement.
"Increased growth and business success of this business model will also add greater diversity to income streams for trustees, lawyers and accountants. They really took the piss with Performance Related Pay back in the nineties, which is why we had to shut that one down again. But the Big Four have given us their solemn word of honour that this time they won't abuse the new rules, and who are we to disbelieve them?"
John Lewis is one of the best known employee-owned companies, with most MPs owning household gadgets bought from the up-market department store.
Friday, 5 July 2013
From City AM:
My latest blogpost: "Treasury outlines tax breaks for John Lewis-style companies"Tweet this! Posted by Mark Wadsworth at 16:31