Chancellor George Osborne's proposed tax-free share plan is set to face fierce opposition from European politicians, despite strong support at home.
Osborne's plan is to allow firms to offer staff up to £50,000 of tax-free shares in exchange for giving up rights on working hours and dismissals.
However, the scheme is likely to come up against some resistance in Brussels as it disagrees with lawmakers efforts to make European employment rights inviolable, the Telegraph reports.
Under the plan, shares would be exempt from capital gains tax at the time of being sold.
The plan was described as "brave" and "innovative" by entrepreneurs and small business owners. It is a move to help promote small business growth, as well as give workers a new incentive, but it has been criticised because by some because of the benefits staff would lose.
Osborne announced the plan at the Conservative Party Conference and it is set to be fast-tracked through parliament and implemented in April 2013. It is expected to cost the government £100m in lost capital gains tax revenues by 2017-18.
The policy is part of a package of initiatives known as the Coalition's "enterprise strategy". It also included £1bn in funding for science in universities and the prospect of a generous tax regime to develop the shale gas industry.
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