Businesses will be able to choose to offer only the new type of contract for new hires
The government will consult later this month on a proposed new kind of employment contract for ‘owner-employees’. In his speech to the Conservative party conference this morning, the chancellor announced a new capital gains tax exemption for employees who forgo employment rights.
‘New owner-employees will exchange some of their UK employment rights for rights of ownership in the form of shares in the business they work for, any gains on which will be exempt from capital gains tax,’ said a press release issued by HM Treasury and the Department for Business, Innovation and Skills.
‘Companies of any size will be able to use this new kind of contract, but it is principally intended for fast growing small and medium sized companies that want to create a flexible workforce.’
Employees will be given between £2,000 and £50,000 of shares that are exempt from capital gains tax, the Treasury and BIS said. The new contracts will be available from April 2013.
‘In exchange, [owner-employees] will give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual eight.’
Owner-employee status will be optional for existing employees but ‘both established companies and new start-ups can choose to offer only this new type of contract for new hires’.
Companies recruiting owner-employees will continue to have the option of inserting ‘more generous’ employment conditions into the employment contract if they wish.
Individuals liable to capital gains tax are entitled to an annual exemption for the first £10,600 of chargeable gains.
Businesses will be able to choose to offer only the new type of contract for new hires
The government will consult later this month on a proposed new kind of employment contract for ‘owner-employees’. In his speech to the Conservative party conference this morning, the chancellor announced a new capital gains tax exemption for employees who forgo employment rights.
‘New owner-employees will exchange some of their UK employment rights for rights of ownership in the form of shares in the business they work for, any gains on which will be exempt from capital gains tax,’ said a press release issued by HM Treasury and the Department for Business, Innovation and Skills.
‘Companies of any size will be able to use this new kind of contract, but it is principally intended for fast growing small and medium sized companies that want to create a flexible workforce.’
Employees will be given between £2,000 and £50,000 of shares that are exempt from capital gains tax, the Treasury and BIS said. The new contracts will be available from April 2013.
‘In exchange, [owner-employees] will give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual eight.’
Owner-employee status will be optional for existing employees but ‘both established companies and new start-ups can choose to offer only this new type of contract for new hires’.
Companies recruiting owner-employees will continue to have the option of inserting ‘more generous’ employment conditions into the employment contract if they wish.
Individuals liable to capital gains tax are entitled to an annual exemption for the first £10,600 of chargeable gains.
