Could this rights-for-shares business be a good way of avoiding tax?

[BusinessAnalyst2012]

BBC News - George Osborne: Drop rights for a stake in firm

Start up contracting limited company. Invest £2000 of cash in the company account. Make oneself employee no. 1. Employee no. 1 exchanges rights for 100% of the shares in the company, valued at £2000. Employee no. 1 sees the value of his £2000 of shares appreciate as the day rate flows into the company. After a few years of taking a small wage, employee cashes in his shares at 0% CGT.

Am I missing something?

[swamp]

Am I missing something?

Yes, you already own the shares in the company.

[MarillionFan]

Who's going to buy the shares????

[vetran]

for 'PSC's probably. For disguised BBC employees yes.

But for actual employees no, its stupid, they will issue everyone non executive with class Z shares in exchange for their rights, then stiff them on dividends, downgrade them when times are hard etc. The shares will be worthless in a few years.

The C level Managers of course will take a £50K tax free bonus.

When I took my current Job I had a decent bonus deal based on my performance, 3 forced rewrites of my contract later with the threat of dismissal my bonus is now dependant on the appearance of Haileys Comet and virgin Births. I can't imagine this is the last time it will happen. I would take it personally but they did the same to the whole of Europe.

After years of pay freezes etc for the staff The CEO still managed to take $20million in share options last year.

Fix it by changing the Unfair dismissal award to the equivalent of redundancy plus an equal size fine for the state so there is no cheap way of getting rid of people.

If there is a discrimination element treat it as a criminal offence, that way if the member of staff claims discrimination speculatively they can be prosecuted for wasting police time / perverting justice and if the employer is found guilty managers are prosecuted, a few of those and discrimination would disappear.

[kingcook]

Get wifey to start the company. Buy 99% off wifey. Wifey keeps 1% for her part in the scam.

[d000hg]

Get wifey to start the company. Buy 99% off wifey. Wifey keeps 1% for her part in the scam.

HMRC definitely won't ream you for doing this, go ahead.

[captainham]

HMRC definitely won't ream you for doing this, go ahead.

Ream is an under-rated word. I henceforth declare it my Word of the Day.

[vetran]

Ream is an under-rated word. I henceforth declare it my Word of the Day.

Yes I'll have 500