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Irish Independent
5 days ago
- Business
- Irish Independent
Government urged to end to tax barriers of moving companies into employee ownership
IPSA has long argued the current tax structures represent an obstacle for business owners seeking to move their company to employee ownership through Employee Ownership Trusts (EOT). The group has called for Ireland to replicate the EOT model in the UK, where there has been significant uptake through a generous relief on Capital Gains Tax (CGT). The group recently met with officials at the Department of Finance and is calling for targeted reforms to reduce the 'tax obstacles' for EOTs in Budget 2026. It hopes reforms will incentivise succession planning through broader use of the trusts and, ultimately, protect jobs at companies that could otherwise be dismantled after a sale. Marie Flynn, chairperson of IPSA, said gaining political engagement on EOTs was a priority for the organisation. 'It is crucial for convincing the Government to follow the advice of the 2024 Indecon Review to reform the taxation of EOTs in Ireland so that business owners and employees can benefit from an economic model that has proven popular and successful in the UK, US, Australia and Canada.' Flynn said that when owners look to exit their business, sale options typically include trade buyers, private equity firms or the next generation in the family. A third-party sale usually attracts CGT of 33pc. However, with EOTs, there are question marks over whether selling shares to such a trust would just attract CGT. Due to what Flynn called 'unhelpful anti-avoidance legislation', the tax bill when someone sells to an EOT in Ireland could hit as high as 55pc. Flynn added that EOTs are considered 'discretionary trusts' and attract a tax that kicks in when the person who sold their shares to it dies. This means a 6pc tax charge is placed on the trust, with a 1pc levy applied yearly. IPSA wants the Government to remove these tax obstacles through a mix of Revenue guidance and an exemption from the discretionary trust tax regime for EOTs. IPSA calculates that this would result in no revenue loss from 'levelling the playing field.' IPSA's plan also includes the Government implementing a recommendation in the 2024 Indecon review to reform the taxation of Irish EOTs in line with their treatment in the UK. Business owners in the UK have relief from CGT on selling a controlling, or 100pc, stake to an EOT. ADVERTISEMENT Flynn said there was massive potential for EOTs in Ireland. She believed several hundred companies could become employee-owned over the next number of years should the Government support it. An EOT is a trust that enables a company to become owned by its employees. It can be set up by a company's existing owners as part of their exit or succession planning strategy. Founders starting a new business can also set one up if they wish to be employee-owned. IPSA argues that EOTs would benefit Ireland as their wider use would help secure workers' jobs and ensure a company remains in its community. It argues that sales to a competitor can often result in businesses being dismantled or relocated, with an accompanying loss of jobs.
Irish Times
05-05-2025
- Irish Times
Penalisation case taken by Siptu official against union rejected by WRC
A case taken by a long-serving Siptu official who alleged her career had been 'sabotaged' after she made a series of protected disclosures alleging wrongdoing by senior managers at the organisation has been rejected by the Workplace Relations Commission (WRC). In a yet-to-be-published 136-page decision, adjudicating officer Marie Flynn said 12 of the 17 protected disclosures Ger Malone had said she made against the union did not meet the criteria set out under the Act, and she could see no evidence of penalisation in any of the 29 claimed. Several other complaints were not considered by Ms Flynn as they were adjudged to have been time-barred. Ms Malone, a shop steward at the Ray-Ban factory in Waterford and former Siptu national executive council member before she took up a full-time organisation role with the union more than 20 years ago, had made complaints under the Protected Disclosures Act, 2014. READ MORE Had she been successful, she could have been awarded up to five years' salary. During the case, Ms Malone alleged she had been repeatedly undermined and humiliated by more senior officials at the union while attempting to represent workers at third-party employers, including Carlow and Kilkenny county councils. She also highlighted issues concerning representation structures within Siptu itself, where staff are required to join the union they work for and are generally represented by a staff representative council (SRC). During protracted hearings, she said this system was worse than the one unions routinely disparaged at Ryanair and that the entire membership of the SRC had signed a letter criticising it as entirely out of step with the union's publicly stated values. She repeatedly suggested it limited her ability to be represented at the hearings. She criticised the fact that senior managers had a vote in electing members of the SRC, which she chaired for several years, and alleged they had played a part in ensuring she lost elections because they wanted to minimise her influence. A small number of Siptu staff attended some of the hearings to support her, and at least one declined to give evidence because they said it would have the potential to cause them difficulties in their work environment. Siptu, represented at the hearings by one of its former officials, Karan O'Loughlin, disputed much of Ms Malone's evidence, however, and denied any acts of penalisation had taken place. It characterised Ms Malone as an official who repeatedly declined to follow instruction from line managers and, in one instance, opened the union up to a potential defamation case. The WRC adjudicator accepted that five of the intended protected disclosures could be validly regarded as such, but said the remaining 12 did not meet the required criteria under the Act. She said Ms Malone had failed to establish that she had been penalised in any of the ways set out under the Act and rejected claims made in her closing statement that she had been unfairly treated. 'I strongly refute the complainant's assertion that she did not receive a full and fair hearing into this case,' she wrote. 'During the course of the hearing, it became apparent to me that the complainant expected me to investigate the conduct of the respondent organisation, particularly the form of representation it makes available to its staff.' She said she was restrained by the Act in what she could investigate and had done all she could to allow Ms Malone put forward evidence.
