After a decade of rapid growth, Britain’s employee ownership movement is hitting the brakes. New tax rules introduced in last year’s Budget have curbed the number of business owners selling to their staff, following a clampdown on offshore trusts used to sidestep capital gains tax (CGT).
The Employee Ownership Association (EOA) reports that company sales to employee ownership trusts (EOTs) fell from 550 in 2024 to just 200 in the first eight months of this year. The total is now expected to reach around 350 for 2025 — a drop of more than a third.
Fresh figures from HM Revenue & Customs, obtained by accountancy firm Price Bailey, back up the trend. Only 104 EOTs were cleared by HMRC in the three months to June, the lowest level since early 2022.
Experts say the decline follows reforms designed to close tax loopholes exploited by some sellers. Previously, company owners could transfer their businesses to offshore EOTs, whose trustees would quickly resell the company to another buyer, allowing the original owners to pocket the proceeds tax-free.
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