Obstacles to share ownership must be removed, says expert

A consultation on the issue closes today and a Government response to the Nuttall Review of Employee Ownership could be published as early as next week. These follow the Chancellor's recent announcement about 'employee owner' contracts.

"The Government's approach to employee share ownership should be joined up," said Matthew Findley, a tax expert at Pinsent Masons, the law firm behind Out-Law.com.

A Government response to the - Nuttall Review of Employee Ownership could come as early as next week, Findley said.

The Office of Tax Simplification (OTS) today closed its consultation on the complications caused by the tax system for companies who wish to put employee share plans in place. Employee share plans are vehicles for rewarding employees with company shares. The OTS consultation will address some widely acknowledged problems.

"The Government should take the opportunity to simplify the relevant parts of the tax system in order to remove some of the barriers to wider employee share ownership, especially amongst SMEs and private companies," he said.

Findley said that there are some particular problems which the OTS must seek to solve. "For multinationals the problems include difficulties surrounding internationally mobile employees, given that share awards can be subject to different tax rules as compared to cash earnings and other benefits," he said.

"SMEs and private companies face different problems when looking to use an employee share plan to foster an employee ownership culture. These include difficulties around the valuation of private company shares."

Findley also said:  "All companies will be interested in whetherdifficulties associated with PAYE deadlines for share awards are addressed, particularly given the introduction of Real-Time Information for PAYE.”