Selling to your employees: can the company afford to pay you?
An employee ownership trust (EOT) usually pays you out of the company's future cash. We check whether that cash is enough, and when you'd be fully paid, and test a bad patch too.
Your answer
Enter the price, the sale date, the years you'd be paid over and the cash the company will make to see whether it can afford to pay you.
About this calculator
For owners selling their company to its staff through an employee ownership trust. The trust usually pays you out of the company's future cash, so the question is whether that cash is enough.
You type in the figures: the price, the cash today, the bank payments and a forecast of the cash the company will make (after tax and equipment, before the bank and before paying you). We don't connect to your accounts or your bank. Only spare cash and the cash held today pay you: no new borrowing, asset sales or tax on how the money reaches the trust.
It isn't a valuation and doesn't test the legal rules for the sale: the price is yours, and a solicitor confirms the rules are met. The safety margin and the bad patch we use when you leave them empty are our judgement, not law.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
First we work out what the company can spare today (its cash less the cash it must keep) and pay you that, up to what you asked for on the day. The rest is paid in level yearly payments, with any interest added.
Each year we take the cash the company makes, take off the bank payments, and compare what's left with the payment due. If there isn't enough, the missing part moves to the next year and grows with the interest. Then we do it all again with a bad patch.
In the example, £300,000 is paid on the day and £1,700,000 over 5 years at 4%: £381,866 a year. The tightest year has 1.30 times the cash needed, but 30% less cash for 2 years makes the company fall behind, so it's tight. Paying over 7 years passes both checks.
Worked example
Just about: the company can pay you in full by 31 March 2032, and its tightest year has 1.30 times the cash needed, but a downturn would make it miss payments.
sale on 31 March 2027 · paid over 5 years · 4% interest · cash up 3% a year · margin 1.25 times · downturn 30% less cash for 2 years · no new borrowing
| Price agreed for the company | £2,000,000 |
|---|---|
| Cash in the company less the cash it must keep | £300,000 |
| Less paid to you on the day (the least of what you asked for, the spare cash and the price) | − £300,000 |
| Still to be paid to you after the day of the sale | £1,700,000 |
| Yearly payment planned over 5 years, with 4% interest | £381,866.09 |
| Year 1, to 31 March 2028: the company pays £381,866 of £381,866 due, 1.30 times covered, £1,386,134 still owed | £381,866 |
| Year 2, to 31 March 2029: the company pays £381,866 of £381,866 due, 1.35 times covered, £1,059,713 still owed | £381,866 |
| Year 3, to 31 March 2030: the company pays £381,866 of £381,866 due, 1.40 times covered, £720,236 still owed | £381,866 |
| Year 4, to 31 March 2031: the company pays £381,866 of £381,866 due, 1.45 times covered, £367,179 still owed | £381,866 |
| Year 5, to 31 March 2032: the company pays £381,866 of £381,866 due, 1.76 times covered, £0 still owed | £381,866 |
| Interest added on what is still owed | £209,330 |
| Fully paid on this forecast | Year 5, 31 March 2032 |
| Tightest year in a downturn (30% less cash for 2 years) | 0.74 times |
| Fully paid in the downturn | Year 5, 31 March 2032 |
| Yearly payment that fits your safety margin of 1.25 times | £400,000 |
| Fewest years to pay you over that meets your margin and survives the downturn | 7 years |
| Share of the gain free of tax, if the relief applies | 50% |
| Last day the relief claim can be cancelled | 5 April 2031 |
| Spare cash compared with the payment in the tightest year | 1.30 times |
Worked out year by year from the figures you give us: each year's spare cash is set against the payment due to you, and the same test is repeated for a bad patch. The usual safety margin (1.25 times) and downturn (30% less cash for 2 years) are our judgement, not law. The tax notes come from the Taxation of Chargeable Gains Act 1992 (sections 236H, 236O and 280, as amended by the Finance Act 2026). Not legal or tax advice.
Questions people ask
Why does the tightest year matter?
One bad year is when a payment is missed, even if the others are easy. A figure of 1.5 times means the company has half as much again as it needs that year.
Can I just ask for more on the day?
Only up to what the company can spare today. After that the money has to come out of future cash, which is why the later years matter.
How is the sale taxed?
For sales from 26 November 2025, if the sale meets every employee ownership trust rule and you claim the relief, half your gain is free of tax and you pay tax on the other half at the normal rates (the lower rate for selling a business can't be used with it). That tax can be due before you've been paid in full; if you're paid over more than 18 months you can ask HMRC to let you pay it in parts. Until the end of the fourth tax year after the sale, the claim can be cancelled if the trust stops meeting the rules.
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