HC Deb 15 July 1976 vol 915 cc1087-9

Amendment proposed: No. 103, in page 48, line 11, at end insert '(unless the employer is an individual and it can be shown that the car was made so available in the normal course of his domestic, family or personal relationships)'.—[Mr. Robert Sheldon.]

Mr. David Howell

Will the Financial Secretary explain this amendment?

Mr. Robert Sheldon

It concerns an employer who employs a member of his own family. If that employee used a car owned by the employer, he would normally be subject to the benefits-in-kind legislation, although he might be using the car because of family circumstances rather than as an employee. In that case there is a need for a relieving provision, and the amendment provides it.

Amendment agreed to.

Amendment made: No. 104, in page 48, line 12, leave out '58(5)(c)' and insert '58'.—[Mr. Robert Sheldon.]

Amendment proposed: No. 105, in page 48, line 31, at end insert— '(8A) "Full-time working director" means a director who is required to devote substantially the whole of his time to the service of the company in a managerial or technical capacity. (8B) A person shall be treated as having a material interest in a company—

  1. (a) if he, either on his own or with any one or more of his associates, or if any associate of his with or without such other associates, is the beneficial owner of, or able, directly or through the medium of other companies or by any other indirect means, to control, more than 5 per cent. of the ordinary share capital of the company, or
  2. (b) if, in the case of a close company, on an amount equal to the whole distributable income of the company falling to be apportioned under Chapter III of Part XI of the Taxes Act for the purpose of computing total income, more than 5 per cent. of that amount could be apportioned to him together with his associates (if any), or to any associate of his, or any such associates taken together.
In this subsection "associate" has the same meaning as in section 303(3) of the Taxes Act, except that for this purpose "relative" in that subsection has the same meaning as in this Chapter'.—[Mr. Robert Sheldon.]

Mr. John MacGregor (Norfolk, South)

The Minister made an announcement in Committee that he would make a concession to directors of charities. Can he explain exactly how this relates to directors of charities? Am I right in thinking that all directors, not only those in charitable positions, will be brought into the net, but that where someone employed in a charity is earning more than £5,000 a year all the fringe benefit provisions will apply to him?

Mr. Robert Sheldon

The position is that we have made a concession to the effect that a working company director not having a material interest in the company—we have defined that interest as being less than 5 per cent. of the ordinary share capital—will not fall within this legislation. This is a valuable amendment and it should be widely accepted.

Mr. Newton

I am not sure that the Financial Secretary has answered my hon. Friend's point at all. My hon. Friend asked a point which was raised in the Standing Committee and which is certainly of considerable concern to Age Concern and a number of charities, in which I have no direct interest, about how directors of charities would be treated. There was considerable concern that, simply because the word "director" was used; anybody in a charity earning more than £5,000 a year would be clobbered. All that the Financial Secretary said, and said in the statement he circulated, was that there was no intention to catch all these people. We had no clear explanation of how they would not be caught, and the hon. Gentleman has given no such explanation in response to my hon. Friend.

Mr. Robert Sheldon

I thought I had explained the position clearly, and I apologise if I did not. The situation is that where a company director has no material interest—that is, not more than 5 per cent.—he will not be affected by this provision. The same provision applies to the director of a charity, as I thought I explained clearly on an earlier occasion. Such director, who has no control over his own remuneration, will not be brought in.

Amendment agreed to.

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