(Except Clauses 1, 4, 5, 9, 14, 22, 42, 56, 57, 124, 130 to 135, 138, 139, 148 and 184 and Schedules 5, 6, 19 and 25, and any new Clauses and Schedules tabled by Friday 9th May 2003 relating to excise duty on spirits or RÿD tax credits for oil exploration.) - Schedule 22 - Employee securities and options
Finance Bill
4:30 pm
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
I ask the Committee to resist the amendments, which, as the hon. Gentleman says, seek to introduce a clearance facility if transactions that might be considered to be non-commercial are contemplated. The anti-avoidance provisions have been introduced to discourage non-commercial transactions that manipulate the value of company shares. If companies are carrying out their normal commercial transactions, they will not be affected by the provisions and should have no need for a clearance provision to confirm that to them.
The anti-avoidance legislation on manipulation of share valuations on which the legislation is built was introduced in the Finance Act 1988. At that time, the responsibility for considering whether intra-group transactions had increased the value of the company whose shares were used was placed, badly, with the directors and auditors. Under the principles of self-assessment, it is for the company to establish its purpose in carrying out a transaction. If a company wants assurance on that point, it can discuss the matter with its auditors. If an auditor were to sign a certificate confirming that a transaction had been carried out for commercial reasons, that would be good evidence to present to the Inland Revenue. The amendments would place an unnecessary administrative burden on industry and the Inland Revenue for no obvious gain. Therefore, I ask my hon. Friends to oppose the amendments.