Co-operatives UK policy team has submitted a representation ahead of the Spring Budget.
We are asking the Treasury to amend Schedule 37 of the Finance Act 2014 so tax reliefs are applied when a controlling stake of a business is sold to a ‘common ownership worker co-operative’ (COWC) formed by the employees.
Currently this tax relief is only available for Employee Ownership Trusts (EOTs).
What are the key benefits of this change?
This change will offer a mechanism that is ‘low risk’ of tax avoidance for:
- Expanding choices for business owners looking for an exit option
- Making worker-initiated transitions more simple or attractive options to continue businesses
- Incentivising better business practice as COWCs have a more democratic and transparent legal form than EOTs
Co-operatives UK will continue to lobby the Treasury ahead of budget day, pushing for this simple change to the Finance Act to expand worker co-ops and increasingly democratise the economy.