13 minute read
10 News
Leathermarket CBS and Southwark Council welcome residents to new homes in Bermondsey
Leathermarket Community Benefit Society (CBS) recently celebrated the opening of 40 new council homes at Joyce Newman House in Bermondsey.
The new development
provides 40 new council homes for local people, made up of 34 flats and six three-bedroom townhouses. The development also provided a new playground and a community garden at the heart of Lawson Estate, both of which were designed and planted by local residents.
As part of the NEU’s No Child Left Behind The development is named after the late Joyce Newman, a prominent figure in the local community who was the Chair of the Lawson Estate Tenants and Residents Association (TRA) for 40 years between 1940 and 1980.
Jacqui Roche and Debbie Walsh, Chair and Secretary of the Lawson TRA, said “Involvement of our residents from the outset in shaping improvements to our estate is so important for community cohesion and underpins the work of the Lawson TRA.
“We are delighted that our residents shaped the design of the new homes and community gardens on our estate, right from the concept stage. We would like to acknowledge and thank our residents for their commitment to attending the many workshops at each stage of design development. “The success of the partnership between the TRA, residents, CBS, JMB and Southwark Council speaks for itself – 40 high-quality much-needed council homes and a tranquil community garden which has been truly community-led”.
Councillor Darren Merrill, Southwark Council’s Cabinet Member for Council Homes and Homelessness, said “I’m thrilled that the partnership between Southwark Council and Leathermarket CBS continues to be so successful in serving our residents and tackling the housing crisis locally. This community-led housing partnership is building new homes in the heart of London at council rent levels and is a key part of our council homes building programme.”
In line with the council’s local lettings policy and the agreement with the CBS, 50% of the new homes have been let to local JMB residents who had been in housing need for many years. Six JMB residents living on the Lawson Estate have been re-housed into the new homes, including five households who had been living in overcrowded conditions for many years.
The Leathermarket Community Benefit Society (CBS) was set up in 2013 to take forward the development of new council homes which would be managed by the Leathermarket Joint Management Board (JMB) in Southwark. The Lawson Estate is one of many council estates which is selfmanaged by residents through a Tenant Management Organisation (TMO).
New homes completed on Copeland Road in Peckham
Southwark Council has finished a new development on the site of a former car park in Peckham which provides 67 new high-quality homes.
The development is a
mixed-tenure site made up of 24 council homes, 18 shared ownership homes and 25 homes for private sale.
TThe homes are built across three eparate blocks, the tallest of which is seven storeys high. There is also a new multi-use games area at the back of the development which is open for all residents in the area to enjoy.
This development is one of many which Southwark Council is building across the borough to tackle the housing crisis locally. The council already met its target of starting construction on 2,500 new council homes by May 2022, and has plans to start 1,000 more by 2026.
Cllr Darren Merrill, Cabinet Member for Council Homes and Homelessness, said, “I’m delighted to see the high-quality finish on these new homes which are in an enviable location in a vibrant area. These new homes are light, spacious and well-designed and will make a real difference to the lives of local people”.
In line with Southwark Council’s local lettings policy, at least 50 per cent of the new council homes will be offered to local tenants in housing need already living in the local area. This means they can stay close to friends, family and the services they already use. The remaining homes will be let to others on the council’s wider housing waiting list.
David Craddock, M.A. (Oxon.) is a recognised authority in the UK and worldwide on employee share schemes and the author of Tolley’s Guide to Employee Share Schemes.
In this article, David identifies the role that the Employee Ownership Trust (EOT) can fulfil in facilitating the ideal tax-efficient and cost-effective exit strategy as an alternative to a trade sale or an initial public offering.
The Latest Triumph for Employee Ownership
The initiative to introduce the EOT through Schedule 37 of Finance Act 2014 emerged from the Coalition Government as the single most significant triumph in the development of employee ownership since Enterprise Management Incentives (EMI) and the Share Incentive Plan (SIP) were introduced by New Labour in 2000. Unlike EMI and the SIP, which deliver direct employee share ownership to individual employees, the EOT offers indirect employee share ownership. The unique feature of the EOT is that the sponsoring company’s shares are held in a discretionary trust as a collective arrangement for the long-term benefit of the company’s total workforce in stabilising the company’s ownership structure and securing its independence. Although different in kind from EMI and the SIP, either of these two scheme arrangements can, if the company so chooses, operate alongside the EOT and offer direct employee share ownership to complement the collective ownership by the EOT. Notably, the grant of EMI options to senior employees, properly implemented and communicated, can act as a motivational empowerment for executives, thereby ensuring that the shareholder succession is matched by a management succession that is so essential for a successful exit. Nevertheless, the EOT can operate without any accompanying taxadvantaged (tax-approved) employee share schemes, and still offer, courtesy of its own 2014 legislation, if the company so decrees, tax-free bonuses to its employees.
The Headline Capital Gains Tax Exemption: ZERO Tax Charge for the Selling Shareholders
Under Section 236M, TCGA 1992, the Controlling Interest Requirement secures a complete exemption from capital gains tax for the seller of the shares for the sale of the 51% (or more, up to 100%) controlling share interest to the EOT in a defined single tax year. This exemption is available for persons who are not companies. Provided the statutory requirements are met, notably that the shares are in a trading company or the parent company of a trading group, then the capital gains tax exemption is available to an unlimited extent. The fact that the exemption is unlimited is a particularly attractive feature, even if the seller has access to Business Asset Disposal Relief, for the simple reason that the sale of shares to the EOT attracts zero capital gains tax on an unlimited amount of value.
The Income Tax Exemption for Qualifying Bonus Payments to Employees
Chapter 10A within Part 4 of ITEPA 2003, introduced as a new EOT insertion, is devoted to the rules for the tax-free status which accord to qualifying bonus payments to employees. The tax-free status is given as an exemption from income tax for up to £3,600 for each employee in any given tax year, operated for all employees on a same-terms basis. Although it is the establishment of the EOT that provides the opportunity for the company to introduce qualifying bonus payments, it is the company that pays the qualifying bonus payments to the employees and not the EOT trustees.
The Deferred Consideration
The Sale and Purchase Agreement for the sale of the shares is between the existing shareholders and the EOT trustees acting on behalf of the EOT. Although the company is not a party to this agreement, it is the company that funds the EOT through an arrangement that must be non-binding in order to ensure that monies received by the EOT from the company are not subject to income tax. The whole of the sale proceeds, linked to the whole company value, will be paid to the existing shareholders immediately following the sale if the EOT has the available funds, albeit supplied by the company. Alternatively, though, the sale proceeds may be paid as a series of deferred consideration payments over whatever time-period is manageable for the company to fund the EOT. Given that the deferred consideration does not have to appear on the balance sheet, the creditworthy status of the company is protected in the eyes of the business community. This piecemeal payment profile is an appealing feature for a company that, at the actual date of the sale transaction, does not have the full amount of the available cash to fund the EOT.
The Growing Popularity
Since 2014, 1030 companies have taken the EOT route to a company sale. The ownership by the EOT of the shares of the company in perpetuity stabilizes the independence of the company and reinforces the employees’ confidence of continuing employment. In a consultation on exit, as well as discussing the advantages of the EOT, discussion should also be given to the Employee Share Trust (“EST”) which allows a more gradual sale approach over several years. The capital gains tax rate for the sale of shares to the EST (as distinct from the EOT) is the Business Asset Disposal Relief rate of 10%.
Specialists in employee share schemes and reward management
David Craddock has been advising on employee share schemes and employee share trust arrangements for over 35 years. He advises on every aspect of the implementation process, working personally with the client at each stage, and offering solutions and expertise in all the technical questions that require clarification during the consultation.
If you are interested in speaking with David with a view to engaging his expert services for a NO OBLIGATION FREE INITIAL CONSULTATION in Employee Share Schemes, Share Valuations or for the delivery of seminars or courses, then please contact:
T: 01782 519925 • M: 07831 572615 E-mail: D.Craddock@dcconsultancyservices.com Visit: www.davidcraddock.com
MAKE IT YOUR BUSINESS
WREOC EMPLOYEE OWNERSHIP PROFILE - JUNE 2022
1030
EMPLOYEE OWNED
JUNE 2022 RECORD YEAR 2021
UK EO SECTOR 285 X2
NEW EO BUSINESSES DOUBLED SINCE 2020
TOP
38.2% PROFESSIONAL SERVICES* TOP
513.2% CONSTRUCTION 10.5% RETAIL AND WHOLESALE 9.1% INFORMATION AND COMMUNICATION 12.8% MANUFACTURING 5 SECTORS
*INC PROFESSIONAL, SCIENTIFIC & TECHNICAL ACTIVITIES AND ADMIN & SUPPORT SERVICES
CONVERSIONS SINCE 2020 33% PROFESSIONAL SERVICES*
18.3% CONSTRUCTION
11.6% RETAIL AND WHOLESALE 10.2 % MANUFACTURING
9% INFORMATION AND COMMUNICATION
*INC PROFESSIONAL, SCIENTIFIC & TECHNICAL ACTIVITIES AND ADMIN & SUPPORT SERVICES
WHITE ROSE EMPLOYEE OWNERSHIP CENTRE FIGURES ARE PROVIDED BY PROF A. ROBINSON (UNIVERSITY OF LEEDS) AND PROF A.PENDLETON (UNSW).
David Craddock is one of those rare ❛❛ people who has not only a first class grasp of legal and technical issues but also the ability to explain and advise on them in a practical way. ❜❜
Community Fibre accelerates its fibre broadband rollout across Southwark
London’s largest fibre broadband provider, Community Fibre, has announced its continued focus on providing Southwark residents and businesses with its award-winning, 100% full fibre broadband.
The ongoing build throughout
Southwark is part of its target to pass 2.2 million homes and businesses across the capital by the end of 2024. As the broadband provider accelerates across the city, it will aim to serve more than half of the 3.7 million homes in the city.
Unlike other providers, Community Fibre builds, owns and operates its fibre network, and therefore does not rely on BT Openreach or other providers to deliver fast and reliable 100% full fibre broadband directly into individual premises.
Launched in 2013, Community Fibre has so far connected 32 London boroughs to its fibre network. It is rated the #1 Internet Service Provider on Trustpilot, with 96% of its reviews rated 5 stars (December 2022), and commanding an excellent score of 4.9/5.
Business owners in Southwark can now choose to sign up for faster internet speeds from the recently awarded Best Business ISP at the ISPA awards 2022. This year, Community Fibre also launched its 5GIGAFAST package, the UK’s first 5 Gbps 100% full fibre broadband for businesses. Historically, the only broadband choice for businesses was slow ADSL/FTTC or expensive leased lines. With this launch, Community Fibre, will provide businesses with more broadband package choices than ever before, with speeds up to 10 Gbps. As well as 5 Gbps broadband for businesses, its expansive collection of broadband packages also include speeds starting from 150 Mbps up to 10 Gbps, enabling businesses to replace expensive and inflexible leased lines with multi-gigabit full fibre at a fraction of the cost, and with speeds 5x faster* than Vodafone’s 1 Gbps leased line at almost half the price.
Community Fibre’s mission is to deliver 100% full fibre broadband to all the London communities it serves, helping to provide residents with opportunities for education, training, employment, social inclusion, and community projects. It has its own team of Digital Ambassadors who are always on hand to provide local, digital skills training workshops. To provide support and education to those who want to acquire new digital skills, Community Fibre trains members of the community to become qualified Digital Ambassadors, to digitally empower other people within the community. Skills taught at local sessions can range from the basics of how to use email and social media, to website building and helping residents stay connected.
Commenting on its 100% full fibre rollout across Southwark, Graeme Oxby, CEO of Community Fibre states: “We are proud to provide more broadband options for London businesses, whether big or small, with Community Fibre’s 100% full fibre network. As cloud technology continues to advance, we are determined to continue delivering higher, more reliable bandwidth speeds at the most affordable price, to ensure that London businesses aren’t left behind.”
For those interested in finding out about Community Fibre’s awardwinning business broadband packages, you can get in touch by emailing business@communityfibre.co.uk, or calling 0808 196 6056 (Monday to Friday, 9am-5pm).
The Full Fibre Revolution Has Arrived
London’s widest choice of business broadband speeds from the UK’s #1 Internet Service Provider on Trustpilot and Winner of ‘Best Business ISP’ at 2022 ISPA Awards.
Community Fibre is a broadband company exclusively serving the businesses and residents of London. We build, operate and maintain our dedicated fi bre optic network with the most advanced technology available. It’s how we deliver our award-winning, 100% full Fibre-To-The-Premises (FTTP) broadband to over 110,000 businesses.
Speeds from 150 Mpbs to 10 Gbps Same download & upload speeds + unlimited data Prioritised business support from our UK Support team Business SLAs & service guarantees
Find Out More
