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New Clause 12
Excessive pension contributions made by persons who have become insolvent: Scotland
'. For sections 36A to 36C of the Bankruptcy (Scotland) Act 1985 there shall be substituted--
"Recovery of excessive pension contributions
36A.--(1) Where a debtor's estate has been sequestrated and he--
(a) has rights under an approved pension arrangement, or
(b) has excluded rights under an unapproved pension arrangement,
the permanent trustee may apply to the court for an order under this section.
(2) If the court is satisfied--
(a) that the rights under the arrangement are to any extent, and whether directly or indirectly, the fruits of relevant contributions, and
(b) that the making of any of the relevant contributions ("the excessive contributions") has unfairly prejudiced the debtor's creditors,
the court may make such order as it thinks fit for restoring the position to what it would have been had the excessive contributions not been made.
(3) Subsection (4) applies where the court is satisfied that the value of the rights under the arrangement is, as a result of rights of the debtor under the arrangement or any other pension arrangement having at any time become subject to a debit under section 23(1)(a) of the Welfare Reform and Pensions Act 1999 (debits giving effect to pension-sharing), less than it would otherwise have been.
(4) Where this subsection applies--
(a) any relevant contributions which were represented by the rights which became subject to the debit shall, for the purposes of subsection (2), be taken to be contributions of which the rights under the arrangement are the fruits, and
(b) where the relevant contributions represented by the rights under the arrangement (including those so represented by virtue of paragraph (a)) are not all excessive contributions, relevant contributions which are represented by the rights under the arrangement otherwise than by virtue of paragraph (a) shall be treated as excessive contributions before any which are so represented by virtue of that paragraph.
(5) In subsections (2) to (4) "relevant contributions" means contributions to the arrangement or any other pension arrangement--
(a) which the debtor has at any time made on his own behalf, or
(b) which have at any time been made on his behalf.
(6) The court shall, in determining whether it is satisfied under subsection (2)(b), consider in particular--
(a) whether any of the contributions were made for the purpose of putting assets beyond the reach of the debtor's creditors or any of them, and
(b) whether the total amount of any contributions--
(i) made by or on behalf of the debtor to pension arrangements, and
(ii) represented (whether directly or indirectly) by rights under approved pension arrangements or excluded rights under unapproved pensions arrangements,
is an amount which is excessive in view of the debtor's circumstances when those contributions were made.
(7) For the purposes of this section and sections 36B and 36C ("the recovery provisions"), rights of a debtor under an unapproved pension arrangement are excluded rights if they are rights which are excluded from his estate by virtue of regulations under section 12 of the Welfare Reform and Pensions Act 1999.
(8) In the recovery provisions--
"approved pension arrangement" has the same meaning as in section 11 of the Welfare Reform and Pensions Act 1999;
"unapproved pension arrangement" has the same meaning as in section 12 of that Act.
Orders under section 36A
36B.--(1) Without prejudice to the generality of section 36A(2) an order under section 36A may include provision--
(a) requiring the person responsible for the arrangement to pay an amount to the debtor's permanent trustee,
17 May 1999 : Column 728 (b) adjusting the liabilities of the arrangement in respect of the debtor,
(c) adjusting any liabilities of the arrangement in respect of any other person that derive, directly or indirectly, from rights of the debtor under the arrangement,
(d) for the recovery by the person responsible for the arrangement (whether by deduction from any amount which that person is ordered to pay or otherwise) of costs incurred by that person in complying in the debtor's case with any requirement under section 36C(1) or in giving effect to the order.
(2) In subsection (1), references to adjusting the liabilities of the arrangement in respect of a person include (in particular) reducing the amount of any benefit or future benefit to which that person is entitled under the arrangement.
(3) In subsection (1)(c), the reference to liabilities of the arrangement does not include liabilities in respect of a person which result from giving effect to an order or provision falling within section 22(1) of the Welfare Reform and Pensions Act 1999 (pension sharing orders and agreements).
(4) The maximum amount which the person responsible for an arrangement may be required to pay by an order under section 36A is the lesser of--
(a) the amount of the excessive contributions. and
(b) the value of the debtor's rights under the arrangement (if the arrangement is an approved pension arrangement) or of his excluded rights under the arrangement (if the arrangement is an unapproved pension arrangement).
(5) An order under section 36A which requires the person responsible for an arrangement to pay an amount ("the restoration amount") to the debtor's permanent trustee must provide for the liabilities of the arrangement to be correspondingly reduced.
(6) For the purposes of subsection (5), liabilities are correspondingly reduced if the difference between--
(a) the amount of the liabilities immediately before the reduction, and
(b) the amount of the liabilities immediately after the reduction,
is equal to the restoration amount.
(7) An order under section 36A in respect of an arrangement--
(a) shall be binding on the person responsible for the arrangement; and
(b) overrides provisions of the arrangement to the extent that they conflict with the provisions of the order.
Orders under section 36A: supplementary
36C.--(1) The person responsible for--
(a) an approved pension arrangement under which a debtor has rights,
(b) an unapproved pension arrangement under which a debtor has excluded rights, or
(c) a pension arrangement under which a debtor has at any time had rights,
shall, on the debtor's permanent trustee making a written request, provide the permanent trustee with such information about the arrangement and rights as the permanent trustee may reasonably require for, or in connection with, the making of applications under section 36A.
(2) Nothing in--
(a) any provision of section 159 of the Pensions Schemes Act 1993 or section 91 of the Pensions Act 1995
17 May 1999 : Column 729 (which prevent assignation and the making of orders which restrain a person from receiving anything which he is prevented from assigning),
(b) any provision of any enactment (whether passed or made before or after the passing of the Welfare Reform and Pensions Act 1999) corresponding to any of the provisions mentioned in paragraph (a), or
(c) any provision of the arrangement in question corresponding to any of those provisions,
applies to a court exercising its powers under section 36A.
(3) Where any sum is required by an order under section 36A to be paid to the permanent trustee, that sum shall be comprised in the debtor's estate.
(4) Regulations may, for the purposes of the recovery provisions, make provision about the calculation and verification of--
(a) any such value as is mentioned in section 36B(4)(b);
(b) any such amounts as are mentioned in section 36B(6)(a) and (b).
(5) The power conferred by subsection (4) includes power to provide for calculation or verification--
(a) in such manner as may, in the particular case, be approved by a prescribed person; or
(b) in accordance with guidance--
(i) from time to time prepared by a prescribed person, and
(ii) approved by the Secretary of State.
(6) References in the recovery provisions to the person responsible for a pension arrangement are to--
(a) the trustees, managers or provider of the arrangement, or
(b) the person having functions in relation to the arrangement corresponding to those of a trustee, manager or provider.
(7) In this section and sections 36A and 36B--
"the recovery provisions" means this section and sections 36A and 36B;
"regulations" means regulations made by the Secretary of State.
(8) Regulations under the recovery provisions may contain such incidental, supplemental and transitional provisions as appear to the Secretary of State necessary or expedient."'.--[Mr. Andrew Smith.] Brought up, read the First and Second time, and added to the Bill.
New Clause 15
Earnings of workers supplied by service companies etc.
'. After section 4 of the Contributions and Benefits Act there shall be inserted--
"Earnings of workers supplied by service companies etc
4A--(1) Regulations may make provision for securing that where--
(a) an individual ("the worker") in any specified circumstances personally performs, or is under an obligation personally to perform, services for the purposes of a business carried on by another person ("the client"), and
(b) the performance of those services by the worker is (within the meaning of the regulations) referable to a contract between the client and a third party,
relevant payments or benefits are, to the specified extent, to be treated for the purposes of the applicable provisions of this Act as earnings paid to the worker in respect of an employed earner's employment of his (where they would not be such earnings apart from the regulations).
(2) Subsection (1) above applies--
(a) whether or not the client is a person with whom the worker holds any office or employment; and
(b) whether or not there is any contract between the third party and the worker.
(3) Regulations under this section may, in particular, make provision--
(a) for the worker to be treated for the purposes of the applicable provisions of this Act, in relation to relevant payments or benefits, as employed in employed earner's employment by the client;
(b) for the client to be treated for those purposes as the secondary contributor in respect of any earnings which are treated as paid to the worker in connection with relevant payments or benefits;
(c) for determining--
(i) any deductions to be made, and
(ii) in other respects the manner and basis in and on which the amount of earnings that the worker is to be treated as having been paid for any period is to be calculated or estimated,
in connection with relevant payments or benefits;
(d) for apportioning payments or benefits of any specified description, in such manner or on such basis as may be specified, for the purpose of determining the part of any such payment or benefit which is to be treated as a relevant payment or benefit for the purposes of the regulations;
(e) for disregarding for the purposes of the applicable provisions of this Act, in relation to relevant payments or benefits, an employed earner's employment in which the worker is employed (whether by the third party or otherwise) to perform the services in question;
(f) for otherwise securing that a double liability to pay any amount by way of a contribution of any description does not arise in relation to a particular payment or benefit or (as the case may be) a particular part of a payment or benefit;
(g) for securing that, to the specified extent, two or more connected persons (within the meaning of section 839 of the Income and Corporation Taxes Act 1988) are treated as a single person for any purposes of the regulations;
(h) (without prejudice to paragraph (g) above) for securing that a contract made with a person other than the client is to be treated for any such purposes as made with the client;
(i) for excluding or modifying the application of the regulations in relation to such cases, or payments or benefits of such description, as may be specified.
(4) Regulations under this section may make provision for securing that, in applying any provisions of the regulations, any term of a contract or other arrangement which appears to be of a description specified in the regulations is to be disregarded.
(5) Any regulations made in pursuance of subsection (3)(i) above may be framed by reference to--
(a) any certification procedure which may be established by the Treasury for the purposes of that provision, or
(b) such certification procedure established by the Inland Revenue as may be specified;
and any regulations made in pursuance of section 2(2) above or section 7(2) below may also be framed by reference to any certification procedure such as is mentioned in paragraph (a) or (b) above.
17 May 1999 : Column 731
(6) In this section--
"the applicable provisions of this Act" means this Part of this Act and Parts II to V below;
"business" includes any activity carried on--
(a) by a government department or public or local authority (in the United Kingdom or elsewhere), or
(b) by a body corporate, unincorporated body or partnership;
"relevant payments or benefits" means payments or benefits of any specified description made or provided (whether to the third party or the worker or otherwise) in connection with the performance by the worker of the services in question;
"specified" means prescribed by or determined in accordance with regulations under this section;
"third party" includes--
(a) any person with whom the worker holds any office or employment, and
(b) any body corporate, unincorporated body or partnership of which the worker is a member.
(7) Any reference in this section to the performance by the worker of any services includes a reference to any such obligation of his to perform them as is mentioned in subsection (1)(a) above.
(8) Regulations under this section shall be made by the Treasury with the concurrence of the Secretary of State.
(9) If, on any modification of the statutory provisions relating to income tax it appears to the Treasury to be expedient to modify any of the preceding provisions of this section for the purpose of assimilating the law relating to income tax and the law relating to contributions under this Part of this Act, the Treasury may with the concurrence of the Secretary of State by order make such modifications of the preceding provisions of this section as the Treasury think appropriate for that purpose." '.--[Mr. Timms.] Brought up, and read the First time.
9 pm
Mr. Timms: I beg to move, That the clause be read a Second time.
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