Responding to George Osborne's announcement on owner employees Mark Florman, Chief Executive of the BVCA, said:
"This is a great step towards putting the entrepreneurial zeal back into Britain, providing an opportunity to employers, employees and so many of those desperately looking for work. We need to make it as easy as possible for all businesses, but especially small businesses, to take on new staff and boost productivity. This policy should enable Britain's start-ups and many of our most exciting companies to do just that. A new generation of owner-employees will enter the labour market as shareholders, giving everyone a chance to work and share in the proceeds of enterprise. The zero rate of capital gains sends out a strong message that Britain is the place to grow your business. We look forward to working with the Government on implementing this policy."
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Notes to editors:
1. Today the Chancellor announced a new kind of employment contract, where in exchange for voluntarily waiving select employment rights, including redundancy and unfair dismissal, employee-owners will receive equity in the businesses they work for. Any gains on this equity will be exempt from capital gains.
2. Owner employees will be given between £2,000 and £50,000 of shares that are exempt from any capital gains tax. In return they will give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training. They will also be required to provide twice as much notice of a firm date of return from maternity leave - 16 weeks' notice instead of 8 weeks.
3. The British Private Equity and Venture Capital Association (BVCA) is the industry body for the UK private equity and venture capital industry. The BVCA has over 500 member firms, representing the overwhelming number of UK-based private equity and venture capital firms and their advisers.