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Royal Assent was given on 11 May 2001 to measures in the Social Security Contributions (Share Options) Bill under which employers will be able to settle National Insurance contributions arising on share options which were granted from 6 April 1999 to 19 May 2000. Regulations covering the arrangements will be laid and come into force shortly.
Royal Assent was given on 11 May 2001 to measures in the Social Security Contributions (Share Options) Bill under which employers will be able to settle National Insurance contributions arising on share options which were granted from 6 April 1999 to 19 May 2000. Regulations covering the arrangements will be laid and come into force shortly.
The new measures allow companies to settle the National Insurance liability arising on options granted between 6 April 1999 and 19 May 2000 (which remained unexercised on 8 November 2000) provided that notification and any appropriate payment is made to the Revenue within 92 days of 11 May. Where such notification is received by the Revenue, the employer will pay a special employer only contribution based on 12.2 per cent of the deemed gain calculated using the share price on 7 November 2000 and no employee contribution will be payable on the actual gain. Companies which do not send notification and any necessary payment within the 92-day period will remain subject to the existing rules and will be liable to pay Class 1 National Insurance on the actual share option gain.
The regulations will outline the form of notice to be provided by companies, how payment is to be made, and what records employers should keep. The Revenue has said that it will write to all those companies which notified their interest in these measures, informing them of the steps they should take to settle the liability.
Where a gain has already been made, employers have been able to calculate and pay the employer's National Insurance charge on the deemed gain using the share price on 7 November 2000, rather than using the existing Class 1 rules. Those employers who have made use of this administrative easement are still required to send in the appropriate notification, otherwise Class 1 National Insurance will remain due, together with any interest or penalties applicable.
The Social Security Contributions (Share Options) Regulations 2001 will be available from the Stationery Office and on the Revenue's website at www.inlandrevenue.gov.uk/shareschemes.
(Source: Inland Revenue press release dated 11 May 2001.)
Criminal Justice and Police Bill
The Criminal Justice and Police Bill received Royal Assent on 11 May 2001, but crucially, the clauses relevant to disclosure of information by the revenue authorities to the police if criminal activities were left out.
In the House of Lords debate on the Bill, Lord Cope of Berkeley moved an amendment to leave out Part 2, which contains those clauses, following discussion in committee. He said that the Government had agreed to the suggestion that the issues involved in Part 2 required further consideration. He reminded the House of Lords that the issues had proved controversial in various professions. Furthermore, they were 'not discussed in the other place', and should be given proper consideration over an extended period. The amendment was agreed to.
The next day, the Bill returned to the Commons for consideration of the Lords' amendments. Commenting on the amendment that Part 2 be omitted, Charles Clarke accepted reluctantly the amendment 'because of our desire to get the whole Bill through'. His reluctance was notable since the amendment was tabled jointly by a Minister and the official opposition of the House of Lords.
Mr Clarke said that Part 2 would have 'implemented Government policy to improve the ability of public authorities to disclose information for the purposes of criminal investigations or proceedings' as part of the 'overall strategy in the fight against crime'. He was 'disappointed' that the clauses were being removed from the Bill. However, Mr Clarke said that if the Government were re-elected, it would 'consider the best way to proceed with those useful reforms and how to use other legislative vehicles to do so'. The amendment was accepted.
(Source: Hansard, 10 May 2001, Vol 368, No 82, cols 302 to 304.)
Finance Bill
The Finance Bill received its third reading on 9 May, the standing committee having concluded its debate of the Bill. It received Royal Assent on 11 May 2001.
