Skip to content
Exit Better logo
Book free call

The EOT process in 5 simple steps

So, you’re thinking about handing over the reins, but not to just anyone. That’s where the EOT comes in: a structured process, and with the right people behind it, runs smoothly, cleanly, predictably, and without the usual bureaucratic red tape.

A smiling man holding up a sign that reads Tax Relief

Step 1

Feasibility – is this even a good fit?

You don’t want to commit time, money, or energy if this thing’s a non-starter. So we start by checking the basics.

  • Profit & Cash Flow

    Can the business afford to buy you out?

  • Your Setup

    UK-based? Still trading? Good.

  • Control

    Can you sell 51% or more? That’s the threshold.

  • Team

    Enough people to make the model work?

  • Valuation Goals

    Are your expectations realistic?

What you’ll walk away with:

  • A yes/no (we’re honest)
  • Ballpark valuation
  • Timeline estimate
  • Fixed-fee quote if it’s a go

We’re not here to sell a dream. If your business isn’t right for an EOT, we’ll tell you. If it is, we move.

A founder in a suit raising both fists in celebration

Step 2

Valuation – what’s it worth?

This matters. Everything’s built on this number.

We handle the valuation based on:

  • EBITDA multiples
  • Discounted cash flow
  • Sector comparisons
  • Our experience with 87+ EOTs
A woman thinking, with a thought bubble above her

It needs to be fair — HMRC expects market value, employees need to believe in it, and we can handle valuation or bring in an independent expert.

Step 3

Legal setup – making it real

Now the structure takes shape. The EOT is formed. Documents get drafted. Boxes ticked. This is where it shifts from idea to deal.

  • The Trust is created

    A legal entity with a governing deed.

  • Agreements are written

    SPA, loan notes, trustee appointments.

  • Trustees are appointed

    Usually a mix of seller, staff, and independent.

  • (Optional) HMRC Clearance

    Not required, but we often recommend it.

We work hand-in-hand with legal. No off-the-shelf paperwork. No last-minute surprises. The aim is to get it water-tight.

Step 4

Telling the team — and getting it right

You’ve got the structure. Now you need to explain it — clearly, calmly, and in plain English.

We guide you on:

  • When to tell staff
  • How to say it — town halls, emails, 1-1s
  • What to include — the why, the benefits, what stays the same
  • Answering their questions — live or written Q&As
A group of employees, one raising a hand

This isn’t just about information. It’s about trust. If it feels like something’s being done to them, not for them, morale will tank.

Step 5

Ongoing support — what happens after the sale

EOTs aren’t fire-and-forget. This is an ownership structure that needs managing. We stay involved, long after the dust settles.

  • Trust compliance

    Stay onside with HMRC

  • Bonus schemes

    Up to £3,600 per head, tax-free

  • Trustee advice

    Especially helpful for employee reps

  • Repayment monitoring

    We track the schedule and help plan cash flow

  • Culture coaching

    Subtle, but important. This isn’t just a tax play — it’s a mindset shift.

An EOT is more than paperwork — it’s a long-term move backed by close to 3,000 UK employee-owned businesses since 2014. The ones who got it right had the right people early on, and that’s where we come in.

Want the short version first? The EOT quick-start guide. Already employee-owned? See our employee-owned firm advisory, EOT bonuses and accounting and what happens when an employee leaves.

Take this with you

Cover of the guide: EOTs — How do they work?

Free guide

EOTs: How do they work?

The mechanics, step by step, from valuation to completion. We’ll email it to you.

Updated September 2026 for the post-Budget tax position.

We use your details to reply to you and for nothing else. See our privacy policy.

Questions owners ask about the process

How long does an EOT take?

The main timeframes for setting up an Employee Ownership Trust (EOT) are influenced by deal complexity, due diligence, legal processes, and stakeholder engagement.

  • Deal Complexity: More intricate business structures require longer completion times.
  • Due Diligence: Comprehensive financial and legal reviews extend the timeline.
  • Legal Formalities: Drafting and executing trust and sale documents take several weeks.
  • Stakeholder Engagement: Aligning management, employees, and trustees can add to duration. Tip: Plan for at least three months and allow for additional time if the transaction involves complex arrangements or extensive due diligence.

Related points

  • Preparation: Initial company reviews and valuations set the foundation.
  • Legal structuring: Drafting trust deeds and shareholder agreements ensures compliance.
  • Employee communication: Informing and involving employees supports transparency.
  • Formal completion: Executing the transaction and registering the trust finalises the process.
How much does an EOT cost?

The main costs of an Employee Ownership Trust (EOT) involve professional fees, company size, transaction complexity, and setup time.

  • Professional fees: Costs for legal, financial, and tax advice typically form the largest expense.
  • Company size: Larger or more complex firms usually incur higher costs due to increased due diligence. Transaction complexity: Complex ownership structures or multiple shareholders increase setup difficulty and fees.
  • Setup time: Establishing an EOT can take several months, adding indirect costs.
  • Ongoing costs: Post-setup governance and compliance can generate ongoing expenses. Tip: Engage specialised EOT advisors early to estimate accurate costs based on specific company circumstances.

Related points

  • Legal fees: Essential for drafting trust deeds and sale agreements.
  • Financial advice: Required for structuring tax-efficient and compliant transactions.
  • Valuations: Needed to determine the business value for the trust purchase.
  • Administrative expenses: Covering company restructuring and trustee setup.
  • Variable total cost: Typically ranges from 15,000 to 35,000 depending on company size and complexity.
Can you reverse an EOT?

The main points about reversing an Employee Ownership Trust (EOT) are that it is generally difficult, legally complex, and often impractical once established.

  • Legal complexity: Reversing an EOT involves navigating strict legal and trust frameworks.
  • Irrevocable structure: EOTs are designed to be long-term, making reversal rare.
  • Financial implications: Existing financial arrangements may limit reversal options.
  • Business impact: Reversal can disrupt employee ownership culture and trust.
  • Limited precedents: Few examples exist of successful EOT reversals. Tip: Seek specialist legal and financial advice before considering any reversal of an EOT.

Want to explore an EOT?

We’ll walk you through the basics. No pressure. No commitments.

  • Free call
  • Clear advice
  • Real numbers
Book free call

Takes 60 seconds. You’ve got nothing to lose.

Written by Parag Patel | Strategy and Tax Planning Consultant

Parag leads the Exit Better team at JLA Accountants, advising owners on employee ownership, succession and the tax that comes with both.

About the team