Seetec is urging government to use the Budget’s change to capital gains tax for founders disposing to Employee Ownership Trusts (EOTs) as a catalyst to place employee ownership more meaningfully at the centre of the UK’s growth and levelling-up agenda.
While the reduction in tax relief has caused understandable concern across the employee ownership (EO) sector, with fears the reduced incentive may slow adoption, Seetec believes the incentive remains favourable compared to other founder exit routes and helps ensure businesses transition to employee ownership for the right reasons. This moment, the organisation argues, should be used to refocus attention on what employee ownership delivers for the UK economy: higher productivity, stronger local economies and long-term resilience.
As a mature employee-owned business, Seetec is not directly affected by the change, but is encouraging policymakers and commentators to look beyond founder disposal mechanics and give greater emphasis to the performance, stability and long-term contribution of EO businesses.
“Employee ownership is a practical way to build stronger businesses, support growth, and keep value in the communities where it is created,” said John Baumback, Seetec CEO. “This is the right moment to focus less on the transaction and more on the long-term benefits for the economy and the workforce.”
At the recent Employee Ownership Association (EOA) Conference in Telford, leaders from across the sector – representing a growing cross section of UK industry – highlighted the real benefits EO businesses deliver: stronger cultures, deeper engagement, improved wellbeing and better productivity.
What EO is not and why it matters for the UK Economy
Employee ownership is more than a method of business disposal. Crucially, it avoids dynamics that weaken long-term economic resilience:
- Shares are not sold out of the UK, helping keep profit, ownership and decision-making within the national economy.
- Businesses are less exposed to sudden takeovers, protecting jobs, organisational identity and continuity for customers.
- Decision-making is more likely to take a long-term view, reinvesting value into the business rather than extracting it for quick shareholder wins.
These features mean EO businesses often deliver greater stability, stronger local roots and more consistent investment – all of which directly support the UK’s growth and levelling-up priorities.
EO builds better workplaces because it changes the foundation of how people relate to their jobs; rather than working for the business, they work as part of the business. Many EO organisations adopt responsible employment standards, including paying the Real Living Wage and undertaking regular salary review, pursuing B Corp accreditation or similar, or voluntarily going beyond statutory requirements on wellbeing and workforce support – signing up to charters that hold employers to genuine equity standards such as Disability Confident or the Armed Forces Covenant. These socially conscious choices in turn can help to reduce avoidable pressures on public and health services, contribute to improved productivity, organisational performance and healthier local economies. It is another way in which employee ownership underpin the UK’s growth and levelling-up ambitions.
Seetec is urging government to take practical steps that steps to maintain momentum and unlock further value from the EO model. These include embedding employee ownership in local and regional growth plans, recognising EO within public procurement approaches where social value and performance are evidenced, maintaining and strengthening tax-free profit-share allowances for employee owners, and exploring transaction incentives linked to the depth of employee ownership.
Seetec’s purpose is to help people, businesses and communities achieve sustained and purposeful growth. The company continues to work with fellow employee-owned organisations to grow social value, strengthen leadership capability and demonstrate the wider contribution EO can make to the UK economy.
“The rules may have changed, but the opportunity for the UK is unchanged,” added John Baumback. “Employee ownership is a proven path to stronger businesses and stronger communities. Our focus will always be long-term impact rather than the extraction of short-term profit — delivering benefits for the economy both regionally and nationally.”
