This month, Baxendale’s Legal Advisor Ewan Hall presented the inaugural Employee Ownership Expert Briefing organized by Co-operative Development Scotland (CDS). In a session designed to inform and educate business advisors, Ewan described how increased Government support and tax breaks are contributing to a wider appreciation and understanding of how employee ownership can have a tremendously positive impact on productivities, employee engagement and the communities in which businesses operate.  The audience of lawyers, accountants, bankers and other advisors heard how employee buyouts are a tried and tested alternative to more traditional exit routes for business owners such as a trade sale or management buyout.

For a full overview of the session’s content click here and to read CDS’s blog on the session click here.

Baxendale Ownership provides specialist funding and transition expertise to support successful transitions to employee ownership. If you are interested in how employee and mutual ownership can help your organisation flourish contact Ewan Hall on or call 0845 680 6702.

Deputy Prime Minister Nick Clegg today called for the growth of employee ownership in the UK and congratulated Baxendale Ownership on its 30th anniversary in employee ownership at the inaugural Robert Oakeshott memorial lecture.

Speaking at the Law Society on Chancery Lane, London, Clegg championed the employee owned model and backed the Employee Ownership’s Associations calls for a threefold increase in the value of employee owned first to UK GDP by 2020.  Clegg called for co-ownership to be “hardwired into the British economy” and said “up and down the country, across public and private sectors, people-centered workplaces are contributing more and more to the economy and, through tough economic times, these firms can outperform others.”

Specific announcements in the speech included:

  • That the Government will inject £50m unto the sector, “making it easier for staff to take over the running of companies and for new firms to set up under employee owned models”.
  • A reiteration of last week’s Budget announcement that Capital Gains Tax relief will be introduced for those who sell a controlling stake in a company to their employees.
  • That it is vital in growing the sector to raise awareness amongst business advisors, lawyers and accountants, who until now have too often ignored this business model
  • That the Government will publishing a consultation that will assess the impact of a range of options to make sure the right people benefit from any tax changes

During the Q&A after the speech, Campbell McDonald, Director at Baxendale Ownership thanked Clegg and the Government for standing by its own rhetoric and introducing changes to encourage greater ownership by individual employees.  He also called on the business reporters in the room to help in spreading awareness of the co-ownership model amongst business advisory, lawyers and accountants.


Baxendale Ownership welcomes today’s Budget announcement, which outlined a number of ways in which the Government will do more to support employee ownership.

The Chancellor announced in his budget speech additional incentives to be made available in 2014 to help businesses transition to employee ownership.  This will include a provision of £40 – 50 million annually from tax year 2014-15 to encourage uptake of employee ownership structures for businesses.

This fund will be used to support:

(1) A new capital gains tax relief on the sale of a controlling interest in a business to an employee ownership structure. This relief is related to the development of an “off the shelf” employee-owned company model by the Department for Business, Innovation and Skills and the Implementation Group on Employee Ownership (of which Baxendale Ownership is a member). The intention is to introduce legislation for the relief in Finance Bill 2014.

(2)  Responses to recommendations in the Nuttall review of employee ownership (see the response here) and to proposals from other employee ownership advocates.

The government will also consider further incentives in this area, including measures targeted at indirect employee ownership models.

The chancellor also announced that Government will consult on introducing a new tax relief to encourage private investment in social enterprise by this summer, with a promise to introduce the relief in the Finance Bill 2014.

Welcoming these changes, Baxendale Ownership’s Legal Director Ewan Hall said:  “We will not know the details of these proposals until the Finance Bill 2014, however this is potentially a major boost for employee ownership in the UK.  Baxendale Ownership have for some time been lobbying for a capital gains tax incentive for transitions to employee ownership which will give business owners and their advisers a powerful incentive to consider employee ownership.”

Baxendale Ownership Director Campbell McDonald said: “The Government has shown commendable foresight in acting now to incentivise a growing and dynamic social investment market. The UK is now the pace setter for mobilising social investment as a powerful force for good in a financially constrained world.”

To find out more about Baxendale Ownership’s approach to supporting the policy agendas described above, please contact us on 0845 680 6702.

2012 saw the publication of the Nuttall Review which made a number of recommendations to help promote employee ownership in the UK.  The government is looking to implement a number of these recommendations, the latest being changes in legislation to simplify the rules on share buybacks and treasury shares for employee owned businesses.

In a share buyback, the company buys the shares from the shareholder and the shares are then cancelled and cease to exist.  This can be a very useful way of the company funding the acquisition of its own shares.  However, share buybacks are subject to a number of rules.  These include:

  • The shares must be paid for immediately in cash.
  • A 75% majority shareholder vote must approve the buyback.
  • One shareholder resolution is needed for each buyback.
  • The company must usually pay for the buyback out of distributable reserves.

The proposed new changes are designed to help make this process easier where a buyback is related to an employee share scheme (which will nearly always be the case for an employee owned company).

The key new changes for employee share scheme share buybacks allow for:

  • Share purchases to be paid for in installments
  • Buybacks only need to be approved by a majority vote.
  • Multiple buybacks can be approved in advance in one shareholder resolution,
  • It is easier for companies to pay for the buyback, even where they do not have the distributable reserves.

These changes should make it a lot easier for employee owned companies to implement a share buyback.

However, companies do not always want to use a share buyback to purchase an employee’s shares.  By cancelling the shares, the shares cease to exist which changes the number of shares in issue and the value of those shares.  It also makes it harder to make the shares available to other employees.  This is one of the reasons that an employee owned company often uses an employee benefit trust to purchase the shares.

This is where the new rules on treasury shares may be useful.  Currently, public companies (who are usually companies with their shares listed on a stock exchange) have the ability to hold shares that have been purchased in a share buyback and instead of cancelling them they can be held as treasury shares.  These shares are held by the company and are available to be issued to future shareholders.

Up until now, private companies have not been able to hold their own shares in this way.

The proposed changes will allow private companies to hold their own shares and remove the requirement to cancel the shares following a buyback.

This could be a very useful option for some employee owned companies.  It may mean that some companies no longer need an employee benefit trust to make their internal share market work.

None of the above changes are in force yet.  The legislation to implement the changes is due later in 2013.  We will let you know when a date has been confirmed.

If you would like to read the full details of the proposed changes, you can find them here.


Learn how an employee buyout in 1994 has helped Tullis Russell improve performance and retain its independed and find out about the support and help available from Co-operative Development Scotland

“Because our employees are the shareholders in the business, rather than outside investors, they are more engaged and productive as a result. That makes a big difference to Tullis Russell.” Chris Parr, Chief Executive, Tullis Russell

The Tullis Russell Roadshow marks the culmination of Co-operative Development Scotland’s roadshow marking the UN’s International Year of Co-operatives 2012.

Each roadshow has been designed to celebrate the success of co-ownership in Scotland.

Tullis Russell has thrived – and retained its independence – since an employee buyout in 1994.

This event offers and opportunity to meet the business, tour their factory and find out more from Chief Executive Chris Parr about how employee ownership has delivered sustainable improvements in performance.

The event takes place at 10am on 16th November at Tullis Russell Group Ltd, Markinch, Glenrothes, Fife KY7 6PB, places are free but limited, register here:

Scott & Fyfe Limited, the Tayport based technical textiles business that is currently family owned, has announced that it is to transform itself into an employee owned company.

Mr Scott & Mr Fyfe started a linen works in 1864 and the company is now one of the few survivors of the Tayside jute industry. It reinvented itself in the 1960s with the development of polypropylene to become a leading player in the flexible industrial bulk container business. This was achieved under the chairmanship of Hamish Tough who retired in 2009.

New chairman Professor Nick Kuenssberg and the new chief executive John Lupton recruited in 2010 introduced a number of significant changes which have led to a profitable professionally managed business with an innovation and export led strategy, the benefits of which have been recognised by the family.

Hamish and his sons Richard and David, both currently directors of the company, represent the family owners. They have decided that the long term sustainability of the company will be best served by building on this new strategy and moving to employee ownership.

After months of discussion and consultation within the family and the board, supported by Co-operative Development Scotland, Scottish Enterprise and specialist consultants Baxendale Ownership, this dramatic decision was announced to the 100 employees of the company with a detailed presentation on 13 September.

The family will sell all their shares to a newly established Scott & Fyfe Employee Benefits Trust which will always own a majority of the ordinary shares. Richard and David Tough will reinvest the bulk of the proceeds in redeemable preference capital which will be paid out over a period of years.

In parallel a Share Incentive Plan will be set up to facilitate the issue and sale of shares to individual employees. Employees will receive a one-off award of 1,500 shares each, 5% of the annual profit in shares and will have the opportunity to buy shares each year. Additionally senior employees will benefit from the issue of share options which will vest on satisfaction of demanding performance criteria.

In this way only current employees and the Employee Benefits Trust will be ordinary shareholders in the company. All employees will be shareholders and will have the opportunity of building a cumulative package of shares over the years which can be cashed in when they leave the company. Under employee ownership legislation there are significant tax advantages for employees under these schemes which make them
even more attractive.

Employees will have the right to elect an employee director of the company and to vote at the annual general meeting. They will also elect two trustees for the Employee Benefits Trust and will see the rights of the existing Employee Forum enhanced.

The combination of employee involvement and employee ownership will contribute to the future success of the company and will provide opportunities for employees to build a long term stake in the company.

Nick Kuenssberg, chairman, said; “This move by the Tough family is to be welcomed; this development will help to underwrite an exciting future for the company and its employees”.

Richard Tough added: “This whole process is complicated and will take a few months, but we as a family are fully committed to it and look forward to making it work for all concerned, the employees, the company and the Tayport community.” John Lupton, chief executive, commented: “With the right teamwork we can be entitled to a share of the profits, with the right attitude we can add real value and with the right effort we can go out and make it happen. It is a new dawn for everyone at Scott and Fyfe and its up to us to seize this chance.”

John Alexander, specialist advisor with Baxendale Ownership who has been instrumental in the transition comments: “Scott & Fyfe have used a creative range of share schemes and stable trust arrangements to build a sustainable model of employee ownership that rewards innovation and growth as well as respecting the legacy of the Tough family.”

In the second of a series of spotlight interviews with the leaders of the top performing employee owned and mutual organisations, we talk to Chris Wrigglesworth, Managing Director & Sound Engineer at Clearcut Sound Studios about their recent journey into employee ownership and what advice he has for those who might be thinking of going down a similar route.

Clearcut Sound Studios is an accomplished, independent recording studio in the heart of Soho and has been creating award winning soundtracks for TV, radio, cinema and digital projects since 1993.  In February 2012 Clearcut became employee owned and the new co-owners are very proud of the fact that every time a client calls to book some time, goes in for a session, or even asks for a cup of tea, they are dealing with the owners of the company!

Hi Chris, and thanks for joining us today.  What brought Clearcut Sound down the employee ownership route?

“The team at Clearcut Sound has always been a loyal and committed staff.  Being relatively small, we were (and are!) a very tight group and had a strong relationship with our previous owners, Pete and Carolyn Leggett.  When they started to consider moving onto pastures knew, I believe they felt that the right team was in place to receive the mantel and continue to grow the businesses.  Pete and Carolyn consulted with us and we all worked together to find the right succession solution.  We all realised the immense opportunity for the team and after considering a straight management buyout, we collectively decided on an employee owned model, believing it to be the fairest and most sustainable option.”

Were there any barriers you faced in making the transition?  How did you and your colleagues overcome them?

“In the years leading up to our transition, our previous owners had been taking a step back from the day to day running of the business, with a view to an eventual departure.  They were however still heavily involved in the high-level strategy of the business, so it was important for the rest of the team to fill this gap and take on this responsibility during and after transition to employee ownership.  We all had the company’s best interests at heart, and wanted to operate within the same value set that our previous owners instilled in the business.  To this end, we structured a new management team, where the three studio engineers become directors and our studio manager took on more of the financial responsibilities to become Finance Manager.  Roles and responsibilities have been distributed amongst the team, and our previous owners now sit on the Board, so are available for guidance and counsel.”

What are the key benefits you feel employee ownership has brought to your organisation?

“A sound studio is a very client oriented company.  It is essential that clients have an exceptional experience with us, leave happy and rebook sessions in our studios.  Clearcut Sound has always been focused on high standards, and the move to employee ownership has only strengthened this commitment.  As co-owners, all staff are now geared to ensuring things are perfect, and that our clients have an exceptional experience every single time they engage with us.

The openness in decision making and working knowledge of every part of the company that every co-owner now has, means that ideas can be born, discussed, perfected and implemented really quickly.

Of course, it’s early days yet – our transition to employee ownership was completed in February this year (2012) – but I’m sure that the benefits we have already seen will only grow as our team of co-owners strives to grow our exciting business.  Hopefully our clients can already see a fresh outlook in the company, as we do our best to engage with them and grow our relationships.”

Would you recommend employee ownership to other businesses?

“Yes, definitely!  To know that you hold your own destiny and can take full responsibility in cultivating your own business is tremendously exciting, empowering and satisfying.

I strongly believe that employee ownership can be a great way of continuing a business owner’s legacy.  As well as ensuring the longevity of the business, it’s a powerful way to provide an injection of passion, hard work and growth.  The fresh pair of eyes that the co-owners have on the business is a very powerful thing.  We are all very grateful that our previous owners had such a strong belief in the team and wanted to provide an opportunity for us to take the company forward, grow it, and share in the rewards.”

If you went through an employee buy-out again, what would you have done differently?

“We spent a lot of time considering our options, and in the first instance we were incorrectly warned off employee ownership for being too complicated and expensive.  We then looked into the more traditional management buy-out, but this didn’t align itself with the culture we were trying to create in our business.  It sounded like there was a risk of creating a “staff vs owners” kind of story, and that’s the last thing we all wanted.  Luckily, we eventually had a chat with Baxendale Ownership who simplified the transition to employee ownership process – it was clear that this was the route for us.  Of course, all of the options had to be considered, but if we were to do it again, knowing what we know now, we would have gone into employee ownership straight away and not wasted so much time and effort!”

Are there any tax benefits the business taps into?

“We are in the process of setting up a Share Incentive Plan (SIP) which will allow our co-owners to buy and/or receive shares in the company, giving them a tangible sense of ownership and provide us with a vehicle to share in the profits we hope to generate.  The SIP gives relief on income tax and national insurance as shares are purchased so it also benefits staff in that way.  In turn, the company can claim relief against Corporation Tax, and we save the employer’s National Insurance Contributions on the shares purchased – so it works really well for all parties.”

Does your business feel different since the transition?

“The sense of ownership we all feel is creating a buzz about the company.   Everyone knows that all the effort put in, at the end of the day, is for our own benefit.  This creates an environment where ideas are plentiful and people are willing to get things done.  We have always been a loyal committed staff, and now that we are co-owners this culture has only been strengthened.  There’s a tangible sense of being able to achieve so much as a collective group of owners.”

You must have welcomed some interesting people through the doors of your recordings studios over the years.  Are there any stand-out moments, or projects you can tell us about?

“We meet a lot of interesting characters through both our clients, and the talent that comes in to record.  It is sometimes easy to forget you’re at work, with so many different experiences and interesting people walking through the doors!  Some memorable recent projects include Marmite’s viral take on the Queen’s Jubilee and adverts for Kwik Fit and Diet Coke. One of my personal favourites was creating the sound design for the (Harry) Pottermore world, a large project bringing to life the Harry Potter world online.”

  • Baxendale Ownership provided the specialist funding and transition expertise to support Clearcut Sound Studio’s successful transition to employee ownership. If you are interested in how employee and mutual ownership can help your organisation flourish in hard times, contact us at, email or call 0845 680 6702 .
  • RM2 are the UK’s most comprehensive advisors on share schemes including SIPs, for more info visit their website or call 0800 043 8150
  • Cumulatively the employee owned sector brings in £25 billion to the UK economy every year. Employee owned businesses are increasingly redefining our concept of sustainable business practice, by beating downward trends during the recession and generating highly engaged, motivated workforce capable of delivering innovation, and economic growth to the UK economy.
  • Baxendale Ownership is running a free seminar on 6th September in Glasgow for business owners considering succession planning for their business, for more details and to book your place, email,  or call Denise Logan on: 0845 680 6702

In the first of a series of spotlight interviews with the leaders of the top performing employee owned and mutual organisations, we talk to Fred Bowden, Managing Director at Woollard & Henry about his journey into employee ownership and what advice he has for those who might be thinking of a similar route.

Woollard and Henry are specialist suppliers to the paper industry. Since undergoing an employee-buy out (EBO) in 2002, the business has defied the UK manufacturing sector’s decline by generating a four-fold profit increase over the past 4 years and winning the Queen’s Award for International Trade.

Fred Bowden has been at the helm since 2002, where he led the employee buy-out with assistance from Baxendale Ownership. After starting his working career in engineering, Fred joined the paper industry and held middle and senior management positions with Arjo Wiggins and Tullis Russell. Having formerly been a customer of Woollard and Henry, Fred understood that they had a highly skilled workforce and produced a world class product that could overcome disappointing sales. Since the employee buy-out, Woollard and Henry now export to 23 countries, thanks to new innovative products and lean processes introduced on their production floor.

What brought Woollard & Henry down the employee ownership route?

“The external market was the main factor, the UK paper industry had been in decline for years and Woollard and Henry was no longer commercially viable. The then owner had gone so far as to announce the business would close as he was suffering from ill health and was keen to relinquish his management responsibilities. The employees expressed an appetite to seize the opportunity this presented by purchasing their own company and salvage what they had worked so hard to build up. Woollard and Henry is 135 years old, so we didn’t want to lose that history. And staff were captivated by the idea of being their own collective boss and owning their future.”

What were the barriers your team faced and how did you overcome them?

“The market was going through difficult times, and several key clients – having been told that the business was closing – had found new suppliers.  This meant we as a business had to respond with a better offer, which we did by developing new products for the oil and gas sector and manufacturing currency making equipment. Aberdeen is on our doorstep and is known as the European capital of Oil, so this helped.”

What are the 5 key benefits you feel employee ownership has brought to your organisation?

-       The most striking benefit has been a noticeable change in behaviours. Staff have taken ownership and responsibility for solving problems to help the business flourish. For example, factory floor staff have identified a more efficient manufacturing process for paper which has opened up new markets for us whilst incurring no additional cost as they designed and implemented the changes themselves.

-       As the management team has shared more information with employees over time, employees strategic input has increased benefitting the whole business.  We hold Friday meetings for the whole company to meet. Over time these questions and insights have evolved from little niggles to strategic and financial insights and questions which regularly help the management team make much better decisions

-       Staff turnover and absenteeism are now lower compared to other similar companies in our sector

-       Productivity has climbed by a huge 18% since we made the transition!

-       All of these examples illustrate how we’ve seen some huge improvements in general business performance.  Only this week we were thrilled to learn that Plimsoll, the business intelligence company has ranked us for the first time in the top 10 in the UK Engineering Machine Services category of their yearly report.

Would you recommend employee ownership to other businesses?

“Yes, absolutely.  For us it’s had a tremendous impact – but I would recommend it on the proviso that your organisational culture is right to start with.  What does that mean? Well if the organisation is autocratic and doesn’t have democratic mechanisms built in i.e. embedded employee engagement and approachable leadership team  then it would be incredibly difficult to envisage that organisation being right for becoming employee owned or going through a successful EBO.  You don’t get all the benefits of employee ownership without being willing to share power, and be open.  But if your management team, and staff are in agreement that a flatter structure with more participative culture sounds like a better way of doing business, then this model could be right for you.”

If you went through an employee buy-out again, what would you have done differently?

“I would want to temper people’s expectations inside the business.  The EBO came at a time when the business was in real difficultly and employee ownership sounded like a utopia.  In reality, our principle aim was survival in the first 2 years so we had to ensure that all our internal Partners were aligned with this. A profit share is only beneficial if you have some profits to actually allocate to staff. In the first few years, free shares were distributed instead, which at the time, in a workforce who had not previously had a Share Incentive Plan (SIP) it felt fairly academic and a bit like monopoly money. Having said that, Woollard and Henry is now in the fortunate position to give out a good pay increase and the share value has jumped from 68p to £4.35 each, so those with shares are able to see the fruits of their hard work. So there are no regrets, but as with most things worth pursuing, the process had its challenges.”

Are there any tax benefits the business taps into?

“We operate an HM Revenue & Customs approved Share Incentive Plan (SIP) which benefits both our employees, and the company.  It allows employees to receive or buy shares in the company whilst benefitting from relief on income tax and National Insurance.  In turn, the company can claim relief against Corporation Tax, and we save the employer’s National Insurance Contributions on the share given to or bought by our employees.”

How does the business feel different since the transition?

“If I had to sum it up, I would point out how much we’ve walked the factory floor since becoming employee owners, we’re listening to staff’s views, being approachable and frank about the challenges the business faces.  You can feel the sense of collaboration that now exists – our people are feel and act like owners, and that has made such a positive impact on our culture.”

If you were doing something else other than this, what would your dream job be?

“Managing Barcelona football club in the sunshine with some sangria. Aberdeen hasn’t had a lot of sunshine this year!”

  • Baxendale Ownership provided the specialist funding and transition expertise to support Woollard and Henry’s successful transition to employee ownership. If you are interested in how employee and mutual ownership can help your organisation flourish in hard times, contact us at, email or call 0207 960 6876.
  • Fred Bowden is now an employee ownership ambassador acting on behalf Co-operative Development Scotland, helping to support businesses considering moving into employee ownership across Scotland.
  • RM2 are the UK’s most comprehensive advisors on share schemes including SIPs, for more info visit their website or call 0800 043 8150
  • Cumulatively the employee owned sector brings in £25 billion to the UK economy every year. Employee owned businesses are increasingly redefining our concept of sustainable business practice, by beating downward trends during the recession and generating highly engaged, motivated workforce capable of delivering innovation, and economic growth to the UK economy.
  • Baxendale Ownership is running a free seminar on 6th September in Glasgow for business owners considering succession planning for their business, for more details and to book your place,  email,  or call Denise Logan on: 0845 680 6702

Matt Black meets David Erdal, a Non-Executive Director at Baxendale Ownership and author of Beyond the Corporation: Humanity Working. In the fourth part of his interview on employee ownership, David gives a run down of his top tips for both public and private organisations who are transitioning to employee-owned models.

David Erdal part 4 – top tips for spinning out from Social Enterprise Live on Vimeo.

Baxendale Ownership Limited Senior Consultant : Business Transfer

Location:  Two roles available, one based in London, one in Scotland – travel will be required

Salary: Competitive plus benefits and share ownership

Baxendale Ownership is an employee-owned business which offers a unique range of services to organisations looking to implement long-term, alternative business ownership models. We have a 12 year track record in both the private and public sector, working with some of the best performing employee-owned businesses in the UK and acting as mentors to the UK Government’s Public Sector mutuals programme. We are on a strong growth path and are looking to expand our business. The successful Senior Consultant will work with us to drive this growth, delivering sustainable change for our clients as they look to move their businesses to employee ownership.

What makes us different?

Baxendale Ownership is a true partnership – fully employee owned – with success built on strong principles, a flat organisational structure and a strong commitment to openness. We understand the emotional and operational challenges faced by clients when they want to change the ownership of their business, so we look to build deep, supportive relationships to make this as smooth as possible. That’s why we can’t afford to compromise on the quality of the people we want to join our team – typically high achievers who have the confidence, interpersonal skills and ability to craft innovative solutions to client challenges. You can expect to work as part of a talented and creative team in a trust-based environment which is free from unnecessary bureaucracy and internal politics.

Role description

You will be part of a team that works closely with business owners, employees and legal teams to undertake the complete end-to-end transition of the business into one that is completely or substantially owned by its employees. You will work in partnership with business owners to understand their business plans and strategy, shaping the financial and structural deal that meets the future ownership needs, working with legal teams on the structural matters and supporting employees through the substantial change to employee-ownership.


  • Chartered Accountant with at least 5 years PQE, ideally working with a predominance of SME clients
  • Project management skills, with the ability to adhere to strict deadlines
  • Capacity to work under own direction with the minimum of supervision
  • Excellent verbal and written communication skills, with the ability to engage with employees at all levels
  • Ability to facilitate meetings and present complex financial matters in an understandable format
  • Flexible approach to business requirements and development of innovative solutions
  • Capability to engage and empathise with clients, their objectives and business challenges.
  • High level of PC literacy, especially Microsoft Office

Change management and business transformation experience would be a distinct advantage.

Next Steps

Please apply in confidence to Denise Logan (, including a current CV and covering letter stating your current salary.

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