Business Irish

Monday 17 June 2019

Fears grow over Brexit threat to Irish staff share schemes

 

Dalata CEO Pat McCann
Dalata CEO Pat McCann

Tax: Gavin McLoughlin

Dalata boss Pat McCann has joined a campaign seeking to stop more than 10,000 Irish savers being left out of pocket after Brexit.

So-called 'Save-As-You-Earn' (SAYE) schemes are at risk without a deal to continue passporting rights for UK financial institutions.

The schemes are designed to allow employees to buy shares in the company they work for in a tax-efficient manner. The employees are granted options to buy shares, then save with a third-party financial institution for a period of years, and at the end of the period then buy the shares using the savings that have been put in place.

Yorkshire Building Society, which operates 10,000 SAYE schemes here, has previously written to the Government pleading for action to keep the schemes alive.

"Given ongoing negotiations over Brexit, we have looked into obtaining an Irish banking licence to continue offering this service," it said in a letter to Junior Finance Minister Michael D'Arcy.

"However, we have concluded that the costs of authorisation would be disproportionate to the benefits of doing so.

"In the event of a no-deal Brexit, or a deal without equivalence in place, we will no longer be able to continue deposit-taking on a cross-border basis in Ireland... unless an alternative arrangement can be put in place, that would mean the [circa] 10,000 savers we have would no longer qualify to receive shares on a tax-efficient basis at the end of next year."

The Irish Proshare Association (IPSA), a lobby group promoting employee share ownership, said the Government is letting SAYE savers down. It said 12,000 people could be affected, and it has suggested two different solutions to the Department of Finance.

"The clock is ticking and the Government has a responsibility to finally act in the interests of these 12,000 Irish workers before time runs out on March 29," said IPSA CEO Gill Brennan. The Department of Finance said it was working with Revenue on potential options.

Mr McCann said Dalata "would encourage the Government to act now and protect all workers who they previously made a commitment to through the SAYE scheme".

He said the scheme was one of Dalata's "most effective tools for productivity and employee retention."

"More than 400 employees are in Dalata's SAYE scheme. They work at all levels in the company, from general managers to chefs to accommodation and our central office employees.

"Dalata Hotel Group believes passionately that our employees should share in the benefits of the company's success. Employee share ownership allows them to do that." Mr McCann said that his employees' SAYE savings won't be affected by a hard Brexit because they're in an institution with an Irish banking licence.

Indo Business

Also in Business