(Except clauses 4, 7, 10, 19, 35 and 72) - Clause 26 - Employment income provided through third parties

Part of Finance (No. 3) Bill – in a Public Bill Committee at 2:15 pm on 19 May 2011.

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Photo of Ian Murray Ian Murray Labour, Edinburgh South 2:15, 19 May 2011

I hope that the hon. Member for Watford, who has a photographic memory, will remember that the word “charming” was used, so he can remind us of it in 10 years’ time.

I wanted to make a point about the make-up of organisations and companies. What happens if a director of a company puts money into it as loan stock, and then the company, during the course of the repayments of that loan stock, is sold, which would mean that the company was sold without that directorship? The director would become a third party of that business, and the business would start to repay the loans, perhaps. How would that be looked on in terms of the HMRC regulations? The loan would, at first sight, seem as if it were going to an individual from an unconnected third party, but essentially, a commercial transaction would be taking place between the third party company and the original director from the first business.