HMRC Research Confirms EOTs Work - But Discovery Remains "Accidental"

Despite the growing popularity of Employee Ownership Trusts (EOTs) as an exit strategy, new research commissioned by HMRC reveals that many business-owners stumble upon the model by chance rather than design. Most hear about EOTs informally - through peer networks, LinkedIn posts, or advisors—highlighting a major awareness gap. As more firms adopt the model to secure their legacy and retain talent, the findings raise an urgent question: how can more owners be intentionally guided toward this transformative option?

The Discovery Problem: Despite being available since 2014, business owners are still discovering EOTs "by accident" rather than through intentional research. Owners frequently stumble upon the model through peer networks, business conferences, or LinkedIn posts from companies that have already transitioned.

Sector Implications & Next Steps:

The study underscores a clear need for structured awareness-building around EOTs. Key implications include:

1. Awareness Crisis Confirmed

• Most business owners learn about EOTs through chance encounters with peers

• Professional advisers aren't consistently presenting EOTs as exit options

• Online visibility remains inadequate despite social media success stories

2. Massive Untapped Market

• If successful EOT companies are only discovered accidentally, thousands of suitable businesses remain unaware

• The "word-of-mouth" discovery pattern suggests exponential growth potential once awareness improves

3. Quality vs Quantity Tension

• While current EOTs show strong success rates, expert commentary (Graeme Nuttall) warns that scaling requires proper employee engagement mechanisms

• Advisers must develop expertise beyond legal mechanics to ensure cultural transformation

Urgent Actions Needed:

• Professional advisors and accountants must be better educated and proactive in presenting EOTs as a mainstream option early in exit planning. Develop employee engagement expertise alongside technical knowledge

• Industry bodies and trade associations should run targeted campaigns, workshops, and case studies highlighting EOT success stories. Create professional development programs for advisers on post-transition employee engagement

• Peer-led storytelling, especially on platforms like LinkedIn or through business forums, should be amplified with coordinated messaging and supported by EOT specialists.

• Government-backed resources should be simplified and publicized, reducing the reliance on “accidental discovery.” The government should consider whether current promotion of EOT benefits reaches the right audiences and evaluate if additional incentives could accelerate awareness without compromising quality

The Bottom Line: EOTs work brilliantly when properly implemented, but the sector faces a classic "best kept secret" problem. With CGT relief proving to be the key motivator and employee engagement benefits clearly demonstrated, the challenge isn't proving EOT effectiveness - it's ensuring business owners know they exist.

The research shows we have a proven model. Now we need systematic awareness-building to unlock its full potential while maintaining the quality standards that make EOTs successful.

The full HMRC research and expert commentary can be found here