Finance Bill

I was not going to go that far. I assume that the Government are acting in good faith and at least trying to deal with tax avoidance. I am concerned about the practical difficulties that might result from the two different definitions. I am not here to speculate on the ultimate motives—I did that in the Budget debate. One can place a charitable interpretation on what the Government are trying to do. In the evidence that was given to the Treasury Committee, John Whiting, a PricewaterhouseCoopers adviser, whose name has been mentioned several times in the discussions, said of clause 25:"““Whilst the announcement of proposals to tackle Management Service Companies was seen as controversial at the time of the pre-Budget report, the Treasury and HMRC are undoubtedly right to tackle this area. Consultations on the proposals have been constructive and the refined proposals, focusing on MSC providers, are a good way forward, though more discussion is needed to ensure the targeting is precise with no collateral damage.””" It is therefore possible to make the case that the hon. Lady and I are making more sympathetically than the hon. Gentleman suggested. The key point is how we distinguish in practice between MSCs and companies that fall outside the definition. The distinction is crucial because, as the hon. Member for Chipping Barnet said, companies that fall within the new definition are liable for tax debts, which can be astronomical. As I understand it, some progress has been made in narrowing the definition of the professional groups who are likely to be involved. Accountants are now excluded, but as the hon. Lady asked, what is an accountant? Are company secretarial services included? There is a spread of possible professions. The hon. Lady cited another definition, which she did not complete. It raised the possibility that the spread of responsibility could become wide. For example, a spouse’s clause could be involved and extend to cover more distant relationships, perhaps even business partners. The limits of the liabilities are far from clear despite the moderate success of the consultation process, at least in narrowing the definition to some extent. It is worth citing some of the professional bodies. The hon. Lady has done that and I shall not simply repeat all her cases. The Institute of Chartered Accountants in England and Wales is a reputable organisation that has no obvious axe to grind. It stated:"““Many of our members provide a variety of services for MSCs but are acting properly and within our ethical code and professional conduct rules. They are concerned that if the exclusion is not clarified, they could become liable for debts incurred by their clients when they have been acting entirely within the law and the professional conduct rules that govern their services.””" That professional body is trying to get on the right side of the law and not push the boundaries. It simply wants to be crystal clear about who falls within the definition of the schedule. I therefore believe that the sensible way forward is to provide for limited delay. I appreciate that prolonged delay can simply open the way to evasion and people finding a new way around the provisions, so I do not suggest that. However, the method that the hon. Lady proposed of a specific targeted study is one way of achieving the objective. We suggest a six-month delay to give the relevant organisations an opportunity to assimilate the secondary legislation, which we have not seen. The Professional Contractors Group said that it would welcome a six-month delay because the proposals had caused much confusion among legitimate small businesses, especially the question of whether accountants could be deemed to be scheme providers under the Bill. The PCG is an important voice in the debate.