Chancellor said the quiet bit out loud on EOTs

While the call for evidence on VCTs and EIS described as "weird"

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So, tax policy is designed to do two things in theory. One, raise money for the government to spend. Two, alter behaviour by using a mixture of incentives and sanctions.

When the Coalition government of 2010-2015 introduced Employee Ownership Trusts, they were designed as a way of spreading the spirit of enterprise around the economy and democratising business ownership.

Honestly, hand on heart, is that what’s happened?

Let’s not forget that as a means to encourage as more of them as possible, Capital Gains tax relief on disposals to an EOT was set at 100%. So, rather than selling to a company, a business owner suddenly had the tax free bonanza of selling to the staff, where a company’s shares are held in a trust and for the former owners, no CGT to pay.

So, Employee Ownership Trusts were sold as a 0% tax route for founders – even if the reality is far less generous. When the trust eventually sells the shares, the proceeds paid to employees are taxed as income, not capital gains, meaning the effective tax rate is usually much higher than headline figures suggest.