Plus-Project believes that our employees must be treated fairly and should share the benefits of our success. After extensive research we concluded that the best way to achieve this was to adopt an ownership model which was accessible to all employees equally. We believe this decision will have considerable benefits to our staff, our customers and the existing management team.
After the financial crash in 2008, the government lead an analysis of the causes and investigated alternative ownership models. The Nuttall Review, released in 2012, suggested that allowing employees to have an indirect controlling shareholding can result in a better decision making process. Research shows that decisions are often made in the longer term interest of the company and its employees rather than the short term interest of a few shareholders, which places companies in a better position to survive downturns. Another major advantage to an EOT is that an indirect shareholding does not require an investment from those that participate. In contrast to many other schemes, every employee can participate equally irrespective of their financial position.
Plus-Project offers a competitive base salary package with both Christmas and Summer bonuses. The UK government provides a tax break to EOT employees with the first £3,600 of any bonuses free of income tax. In addition, Plus-Project operates an Employee Council with employees able to define benefits ranging from the number of days holiday and medical cover through to an electric car scheme available via salary sacrifice. In a nutshell, this means our employees receive good wages, outstanding bonuses and can choose benefits such as driving a Tesla or riding an electric bike to work. In addition, the profits of any future company sale would be shared with employees as they are shareholders.
To implement an EOT the existing shareholders should be willing to at least consider selling their shares at below market value. This decision is not to be taken lightly, and management teams must recognise that they will likely receive less money than a trade sale. But this is the whole point; an EOT is about fairness and equality and not maximising the financial position of a handful of fortunate shareholders. The existing shareholders gain in other ways such as help with transition planning, a better long term outlook for the company, and a happy workforce.
There is significant evidence that companies operating an EOT model have class-leading levels of service. The sense of ownership and opportunity that is available to all employees heightens dedication and commitment to our customers. In addition, EOTs reward employees through payment of wages and bonuses rather than dividends. Hence, all wages and benefits are subject to PAYE and Plus-Project has no issue with IR35. Plus-Project can therefore provide outstanding teams at rates often better then freelancers.
Implementing an EOT does not mean that all decisions must be approved by their employees. Businesses can continue to operate as usual so Management Teams can still make decisions without approval from employees. However, EOTs have mandatory requirements and qualifying criteria that guarantee consideration of employees’ interests. Structures are put in place to ensure appropriate processes are followed. Employees are not forced to take any interest in the EOT so can continue without any change in their day to day working life. Usually employees enjoy being involved with appropriate decisions and every employee will be interested in the regular financial updates as these effect their benefits.
Quite the opposite. All staff remain employed by Plus-Project and receive benefits through wages and bonuses which are subject to PAYE. Plus-Project remains a UK based company and there is no attempt, for example, to off-shore profits to reduce our tax burden. We are proud to be profitable and believe this comes with a responsibility to pay our tax liabilities for the greater good of society.
An EOT is a government preferred employment model with cross party support. Originally approved by Sir Vince Cable this has widespread support from Sajid Javid, John McDonnell and the Welsh and Scottish parliaments.
An EOT should have clear employee advantages. The existing shareholders must be willing to consider a sale at a value below market value with payment received over an extended period. Try asking your existing shareholders if, in the interest of their employees, they are willing to take less money for their shares with that money received over 6 to 8 years.
UK based companies must file accounts each year. For a small fee anybody can download financial information from either Companies House or CompanyCheck. Information will include the share distribution and dividends paid to shareholders. We encourage employees and customers to use these resources to assess whether companies treat their workforce fairly and make appropriate tax contributions in the UK.