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Today marks a decade since the Employee Ownership Trust (EOT) legislation came into force, transforming businesses and empowering employees across the UK.
Employee Ownership Trusts (EOTs) are transformative trusts that allow companies to become employee owned. Introduced through the Finance Act of 2014, EOTs encourage founders and shareholders to pass ownership of their companies to employees, fostering a culture of shared success and engagement.
Fieldfisher has been a trailblazer in the employee ownership sector, playing a crucial role even before the legislation's inception. In 2012, Graeme Nuttall OBE, a Fieldfisher Partner and the visionary behind our practice, was consulted by the UK Government to provide insights on expanding employee ownership in the UK.
Graeme led the ‘Nuttall Review of Employee Ownership’ – the catalyst for the new legislation in 2014 – and since the Government’s acceptance of Graeme's recommendations, particularly those supporting the trust model, the number of employee-owned companies in the UK has skyrocketed from about 140 to over 1,650 employee-owned companies (EOCs).
As a firm we are deeply committed to upholding the spirit of the Nuttall Review. We provide expert advice to leading employee-owned organisations on maintaining their structures and support start-ups and growing companies in reaping the benefits of employee ownership.
About the team at Fieldfisher, Peter Taylor of TTP Group said: "Knowing about the critical role of Fieldfisher in the creation and implementation of the EOT model it was natural to ask them to help us in our large and complex transition to an EOT. That has successfully secured our complete freedom to control our destiny in the long-term interests of employees and the company and to focus on our core purpose.”
Benefits of employee-owned businesses
According to the EO Knowledge Programme, the most comprehensive UK study on EO benefits, employee-owned businesses are significantly more productive, profitable, and beneficial for employee well-being compared to non-employee-owned organisations.
This study, commissioned by the EOA and supported by Fieldfisher, highlights the tangible advantages of employee ownership which offers real and exciting alternatives to the traditional business ownership structures in the market.
Much of the growth in the employee ownership sector has been driven by the EOT model of employee ownership as a result of the tax reliefs which were introduced by the Finance Act 2014. Provided the qualifying conditions are met, individuals who sell shares to an EOT benefit from 100% capital gains tax relief. In addition, EOT-owned companies are entitled to operate a qualifying bonus scheme whereby an income tax free bonus payment can be made to each UK resident employee of up to £3,600 per year.
Aino-Leena Grapin of Winch Design said: “Around the 10th anniversary of the employee ownership legislation, we at Winch Design celebrate our 3-year anniversary of being 100% employee owned. In that time, we have seen more of an evolution than a revolution, which I believe is consistent with the spirit of EO which gives us freedom of interpretation within a framework. Our employee owners are increasingly contributing and bringing ideas forward, many of which we are able to implement. As a talent-based organisation, we are certain that employee ownership will help us uphold our culture and values and make us one of the best workplaces in design."
Fieldfisher's success in numbers
- 100 EOTs have been created by Fieldfisher.
- 10 years since our very first EOT.
- 17,500 employee owners have been empowered with our help.
- 300+ new trustees have been appointed by our clients to bring good governance.
- 15% of the organisations we have helped are international businesses.
- We have acted for 20% of the EOT Top 50, as published recently by RM2.
- 10+ sectors including the built environment, financial services, legal, engineering, science and healthcare, consulting, media and technology, environmental clean-up, retail and manufacturing, architects, design, recruitment, and communications.
Celebrating our clients
We have had the privilege of working with some excellent clients over the last decade, including:
- QUINTESSA – our first EOT under the new legislation (and possibly the first EOT).
- WATG – our first US-based EOT.
- ALFORD HALL MONAGHAN MORRIS – an early adopter and a top 10 AJ firm of architects.
- RIVERFORD – delivering EO in a veg box and the first deal completion televised on breakfast TV!
- WINCH DESIGN – a design boutique and the most stylish EO we have ever advised on.
- TTP – one of our largest with 1100 shareholders and complex structuring.
- MAPP – a recent deal and our first venture into property management.
- ZAHA HADID – a deal which attracted media coverage for a very high-profile business with a worldwide brand.
- 3BM – the first spin out of a public business into a mutual joint venture.
- SSQ – acting for a legal recruiter, a new sector for the team, kept them on their toes!
- WOLFGANG DIGITAL – our first Irish (and most recent) EOT.
Paul Harris, Vibe Teaching: "As an update, we couldn’t be happier with our decision to transition to an EOT, and with the decision to use Fieldfisher to assist us with that process. It has not only allowed us to maintain our independence, but has built on our already winning culture and ensured that our unique service proposition has continued to be delivered by a team of ‘bought-in’ and inspired ‘Vibers’, in turn securing we believe, our brand and reputation as the UK’s best teaching agency! Our thanks go out to Mark and the team 😊"
Our market-leading Employee Ownership Solutions team remains at the forefront of guiding businesses through their transition to employee ownership. We help organisations navigate the challenges and seize the opportunities that lie ahead, empowering them to achieve their full potential through employee ownership.
We look forward to continuing this journey and making a lasting impact on businesses and their employees.