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National Insurance Contributions Bill

The facility for the original arrangements and agreements was to deal with the fact that, where tax-incentivised share schemes were entered into, it was difficult for employees to proceed with them, because the tax and national insurance liability often kicks in when an option is exercised down the track, and because it was difficult for them to quantify what their share of the liability might be at that unspecified date and unspecified value in future—hence the arrangements for the agreements to be put in place. That was welcomed at the time. As I tried to explain, we do not see why that should be extended and allowed to cover avoidance schemes, which are the subject of the retrospective regulations. In a sense, it is an added risk that the employer takes, otherwise we would remove from them a substantial risk and place it on the employee.