Ahead of the Spring Budget on 6 March, experts are calling on the Chancellor to widen employee share schemes in order to generate a £2.4 billion boost to the UK economy.
After Sir Graham Brady and some of Britain’s biggest listed companies put pressure on the chancellor to unlock a “new wave of employee share ownership”, Ifty Nasir, founder and CEO of equity management Vestd, is spearheading a campaign to enable more businesses to supercharge their growth.
In last year’s Spring Budget, the Treasury launched a consultation on the Save As You Earn (SAYE) and Share Incentive Plan (SIP) employee share schemes to “improve the schemes and expand their use by making it easier for businesses to set them up and offer them out to staff.”
Vestd’s analysis shows that if 250,000 more businesses set up share schemes, it could generate a £2.4 billion boost to the UK economy.
Ifty Nasir, founder and CEO of Vestd, said:
“The government is looking to re-create a culture of equity ownership in the UK and employee share schemes are one of the easiest ways to drive this investment.
“Just 16,000 businesses currently operate one of the four share schemes backed by the government and there are a number of easy changes that the chancellor could make in his Spring budget to drive increased participation.”
Business leaders and Tory grandees have already called for the chancellor to slash the five year ‘holding period’ in the schemes, and Ifty is calling for wider reforms to drive investment.
He added:
“The chancellor will be looking for opportunities to cut taxes and a 1% corporate tax cut to businesses that create a share scheme would be a huge incentive for
“The Enterprise Management Incentive (EMI) is the most popular share scheme by far, but it’s currently restricted from part-time workers and contractors, as well as being eligible to businesses with less than 250 employees or £30 million of assets.
“The economy is currently plagued by low productivity and struggles to recruit talented staff, and widening access to these schemes would offer a huge boost – giving people a stake in the company their work for is an incredibly powerful motivator.”
