Assess suitability before you commit
EOT Feasibility Report
A clear roadmap for business owners ready to secure their future and their team's success through employee ownership.
An EOT can be an attractive succession and exit option, but the commercial, structural, and practical suitability should be assessed properly before moving forward.
Understanding Your Path To Employee Ownership
An Employee Ownership Trust can provide an alternative exit route for qualifying business owners, one that supports continuity, rewards employees, and can offer meaningful tax advantages when the qualifying conditions are met.
Before any transition, owners need a clear view of suitability, structure, funding, governance, employee impact, and likely commercial implications. The feasibility report is designed to help owners make an informed decision rather than proceed on assumption.
What is an EOT Feasibility Report?
An EOT Feasibility Report is a detailed business review and analysis designed to help assess whether an Employee Ownership Trust transition is likely to be suitable for your company. It considers qualification issues, structure, valuation, funding, and operational implications, giving you a rounded view of what a transition would involve.
The report gives business owners an informed basis for deciding whether to proceed. It is not a commitment to act. It is a practical first step that helps you understand the opportunity, the requirements, and the potential implications before investing further time and cost.
Key elements included in our reports
01
Business Valuation
An indicative assessment of your company's value to provide an initial sense of worth. A more detailed valuation would usually be required at a later stage.
02
Ownership Structure Analysis
A review of how an EOT transition could affect the current ownership structure, with discussion around the future shape of ownership and control.
03
Employee Impact
Consideration of how employee ownership may affect company culture, communication, governance, and day to day operations.
04
Tax Benefits and Funding Options
An assessment of the current tax position and the possible funding routes for an EOT transaction. Tax treatment depends on qualifying rules and proper professional advice.
Who is suitable for an EOT?
Not every UK business is a strong candidate for an Employee Ownership Trust, but more qualify than owners often realise. The model favours stable, profitable companies that can comfortably fund the purchase from future trading, and where a transition to broader ownership genuinely fits the culture rather than being a tax driven afterthought.
We commonly see good candidates among professional services firms, engineering and manufacturing businesses, established consultancies, design and creative agencies, technology services companies, and specialist distributors. Well known UK examples that have used the model successfully include Aardman Animations, Riverford Organic Farmers, and Richer Sounds, which illustrate how diverse the sector mix has become since the Finance Act 2014 reforms.
- •Profitable trading history of at least three years with a track record that supports confident forecasting.
- •A management team capable of running the company without the founder being involved in every decision.
- •Free cash flow sufficient to service deferred consideration over a realistic five to eight year period.
- •A workforce of meaningful size, typically 15 employees or more, where employee ownership has cultural impact.
- •A reasonable customer mix, without disproportionate reliance on a single contract or relationship.
- •Clean financial records, current statutory accounts, and an up to date corporate structure.
For the underlying legislative framework see the UK government guidance on Employee Ownership Trusts and HMRC's detailed Capital Gains Manual at CG67800.
Our feasibility process, step by step
The feasibility stage is deliberately structured so you reach a clear go or no-go decision without committing to a full transaction. Each step is designed to add a layer of evidence, not to push you forward before you are ready.
Step 1
Initial conversation
A confidential discussion about your business, your objectives, and your timescales. We listen first, then explain whether an EOT is likely to fit.
Step 2
Information review
We review headline financials, ownership structure, and key contracts to identify any obvious blockers before deeper work begins.
Step 3
Feasibility report
A written assessment covering valuation indication, qualifying conditions, funding shape, governance, and the practical implications for your team.
Step 4
Decision support
We talk you through the report, answer questions, and help you decide whether to commission a full transaction process or pause and revisit later.
Risks and trade-offs to consider
An EOT is a serious commercial decision, not a shortcut. The most common pitfalls are valuations that exceed what the business can comfortably afford, deferred consideration schedules that leave the company vulnerable to a downturn, and governance structures that blur the line between the founder's continued involvement and the trustees' independence.
Owners should also weigh the price difference between an EOT and an open market sale. EOT prices are typically pitched at fair market value, not at the strategic premium that a competitor or private equity buyer might pay. The trade-off is continuity, employee benefit, and tax efficiency rather than maximum cash on day one.
Where the conditions for relief are breached during the clawback period, the Capital Gains Tax exemption can be withdrawn retrospectively. This is a real risk, not a theoretical one, which is why ongoing trustee governance matters as much as the transaction itself.
Considering an EOT for your business?
Our feasibility review helps you understand whether employee ownership is workable, appropriate, and commercially sensible before you commit time and money to the full process.
Frequently asked questions
What does an EOT feasibility report actually contain?
It typically covers an indicative valuation range, an assessment of the qualifying conditions for EOT relief, a high level funding shape, governance considerations, employee impact, and a clear view on whether to proceed. The aim is to give you enough evidence to make an informed yes or no decision.
How long does a feasibility assessment take?
Most feasibility reports take between two and four weeks once we have the information we need. Larger or more complex businesses, or those with group structures, can take longer. The work is designed to be thorough rather than rushed.
Do I need to commit to selling before commissioning a feasibility report?
No. The report is explicitly designed for owners who are still deciding. Many of the businesses we assess ultimately choose a different route, or pause for a year or two and return when conditions are right. The point of the report is to inform the decision, not to push it.
Will my employees find out during the feasibility stage?
Not unless you tell them. Feasibility work is conducted confidentially with you and a small number of senior advisers. Employee communication is a separate workstream that begins only when you decide to proceed and have a transition plan in place.
What disqualifies a business from an EOT?
Common blockers include a non trading status, a controlling interest already held by another corporate group, persistent unprofitability, an inability to fund deferred consideration, or a workforce that is too small for the model to make practical sense. Some issues can be remedied with time and planning, others cannot.
How does the feasibility report relate to HMRC clearance?
The feasibility report is a private commercial assessment, not an HMRC submission. Where a transaction proceeds, advance clearance from HMRC is sought separately as part of the formal process, drawing on HMRC's Capital Gains Manual guidance at CG67800 and the Finance Act 2014 statutory framework.
Talk to the Employee Ownership Experts
If you're considering an EOT transition and want to understand whether it's the right step for your business, we welcome a confidential conversation.
Trust signals and credentials
HMRC-compliant EOT structures
Finance Act 2014, current rules
Serving all UK regions
London HQ · UK-wide engagements
30+ years exit experience
Tony Vaughan, Head of EO
150+ business exits supported
Across multiple sectors
VEXUS Corporate Limited is registered in England & Wales — Companies House
Real-world examples of EOT feasibility outcomes
Two anonymised cases showing how feasibility work shapes the answer — including when the honest call is that an EOT is not the right route.
Professional services
Owner retirement with a phased handover
Feasibility confirmed strong management depth and supportable deferred consideration over a 30-month exit window.
Read this case studyOwner-dependent SME
When the EOT route was not the right answer
Feasibility surfaced founder dependence, weak succession depth and unrealistic value expectations — an alternative exit was the honest answer.
Read this case studyCommon questions owners ask
Questions UK owners commonly ask about Employee Ownership Trusts
- Owners often ask how long an EOT takes to complete.Read the typical EOT timeline →
- Many UK business owners want to understand the tax benefits of an EOT.Read the 2026 tax benefits update →
- A common question is whether an EOT is suitable for smaller companies.Check EOT eligibility for your company →
Related EOT resources
Continue your research with our core guides on Employee Ownership Trusts.
Read the EOT 101 guide
A plain-English introduction to Employee Ownership Trusts and how they work in the UK.
Compare UK exit options
EOT, trade sale, MBO and private equity weighed up across price, speed, risk and culture.
Browse the EOT Insights hub
In-depth articles on valuation, funding, governance and life after an EOT transition.