The clause will be widely welcomed by the Committee. Along with schedule 16, it introduces a new income tax relief for employees who agree to meet some or all of the employer's secondary national insurance liability arising from restricted or convertible employment-related securities. The ability to visit on the employee the employer's national insurance charge is already available and used with traditional share options, and the clause extends that ability to other sorts of share incentive schemes involving restricted and convertible securities.
Such securities operate in a similar way economically to traditional share options, but with some advantages. With a traditional share option, if one wishes to take advantage of it, assuming it is in the money and there is some point in taking advantage of it—
I would like to ask a question that relates to subsection (3), which provides for the order to come into effect on an appointed day to be made by Treasury order. I know from the debate today and on Tuesday that the Paymaster General is in a backdating mood, and there would be considerable advantage in backdating the effect of the clause—one could call that backdating, retrospectivity or retroaction. Some employers will have built up substantial national insurance liabilities because of the rise in the value of securities in share incentive schemes that were arranged not through traditional share options but through convertible or restricted securities. It would be helpful for employers with those liabilities if, with the agreement of the employee who would benefit, they were able to pass them on by election.
The Minister has been in a backdating mood, so will her largesse apply to this clause?
Let me deal briefly with the date on which the tax provisions come into force. As the
hon. Gentleman is probably aware, the National Insurance Contributions and Statutory Payments Act 2004, which the tax provisions support, was debated in both Houses and received Royal Assent on 13 May. The Treasury order is designed to ensure that the clause 85 provisions come into force at the same time as that Act, so that they are both operational at the same point. The Treasury order is required to switch that on. Whether he decides to call that backdating is up to him. This is a question of timing for the coming into force of the Finance Bill and the national insurance Act that it mirrors for tax purposes. He is probably aware that Finance Bills cannot make national insurance provisions.
Question put and agreed to.
Clause 85 ordered to stand part of the Bill.