Since their introduction in 2014, Employee Ownership Trusts (EOTs) have become one of the fastest-growing exit routes for UK business owners. RM2 has supported hundreds of companies through the process, helping owners secure value for their companies while safeguarding jobs and culture. Best estimates now suggest there are more than 2,000 EOT-controlled businesses, reflecting a growing appetite for ownership models that reward employees and maintain stability beyond the founder’s tenure. But despite this surge in popularity, many misconceptions about selling to an EOT still persist.
- “I won’t get full value for my business.”
- “I’ll lose control.”
- “My management team will miss out.”
- “My employees aren’t ready for the responsibility.”
- “It costs a lot to make it happen.”
- “Recent tax and trustee rule changes undermine the benefits.”
However, sensible valuation, favourable tax reliefs, and flexible transition plans mean owners can achieve comparable post-tax outcomes to a trade sale – without upheaval or risk of changes/cost-cutting by outside buyers. Founders also retain the option to stay on as directors or trustees during the handover period, helping a smooth succession.
EOTs are also inherently inclusive, allowing companies to share profits with staff in a tax-efficient way while still using incentive schemes for key people. Far from being expensive, the transaction process is often simpler, quicker, and less adversarial than selling to a third party. Recent changes introduced in late 2024 have strengthened governance [requirements?], but do not undermine the benefits; instead, they reinforce the EOT model’s credibility and sustainability.
A recent example: In August 2025, The Entertainer, the UK’s largest toy retailer, made headlines when its founders announced they would transfer full ownership of the 160-store chain (and over 1,000 concessions) to its 1,900 employees via an Employee Ownership Trust (EOT). The move reflects their wish to safeguard company values and empower staff (see more here).
For owners thinking about succession, an EOT offers a route that rewards employees, protects legacy, and delivers fair value in a tax-efficient way. RM2’s blog explores each of these myths in detail, helping founders weigh up whether an EOT is right for them. Read the full article here ➜
