Schedule 21 - Approved share plans and schemes
Finance Bill
9:45 am
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
I am not talking about whether the rules in the amendment are better. The rules that currently operate—which are not the rules in the amendment—have been negotiated and discussed, are understood by the Revenue, administrators and trustees, and are perfectly reasonable. They operate now and there have been no developments to suggest that we need to change them. Therefore, the amendment is simply unnecessary, going against the grain of the current procedure that operates between the Inland Revenue, the administrators and SIPs. The amendment would change that and disturb a balance that is clearly operating well. I cannot see the reason for pursuing the system in the amendment, when the current system operates correctly. I am sure that there are continued discussions between the administrators, SIPs and the Revenue in making the returns each year. We want to ensure that the limit is not exceeded and that the rules are properly applied in a scheme that has been widely welcomed as progressive.
Amendment No. 103 seeks to limit the trustee record-keeping requirement to the same tax year for participants who have participated in one or more approved SIPs established by the company or by a connected company in that year. The amendment is not necessary, which harks back to the point that I have just made, because trustees need to keep records of all participants—not just those participating in one or more incentive plans—in order to report details of the share awards to the Inland Revenue. The information required in the amendment is already reported each year.
Amendment No. 104, if accepted, would mean that the trustees would not need to keep any records of participants in one or more approved SIPs established
by the same or a connected company in the same year if the company or participant did not inform the trustees of the participation. That would mean that the trustees would have no way of knowing whether the share award limit had been exceeded. In developing the proposal to allow participation in one or more approved SIP plans established by the same or a connected company in the same year, we were assured by the industry that, in general, there would be only one trustee acting in such a situation and that the keeping of records and reporting would be relatively straightforward. The situation envisaged by the amendment should not, therefore, arise.
I have explained to the Committee how the rules operate now. In making the change to a connected company, there was negotiation and discussion with the people who represent those who operate the schemes. They asked for this change and believe that it is the best way forward. Therefore, it seems entirely inappropriate to disturb that scheme now by accepting the amendments.
Clearly, discussion between the Revenue and the trustees and administrators of SIPs is a constant dialogue. I have every confidence that that collection of organisations is perfectly capable of ensuring that the rules are applied and the limits adhered to in the most efficient, simplest and best way for all concerned. I ask the hon. Member for Arundel and South Downs to withdraw the amendment.