I thank the hon. Lady for her questions. I will start with when the loopholes were identified. HMRC had been aware of the first two loopholes for some time. It has seen increasing numbers of cases and larger amounts of tax avoided using these structures. In the past three years, just 15 cases involving intermediaries accounted for nearly £7 million tax at stake.

Closing the loopholes is partly protective; clamping down on this avoidance immediately stems further loss of revenue. Some, but not all, of this avoidance is disclosable under the disclosure of tax-avoidance schemes regime, so a full scope of the evidence is difficult. However, closures of loopholes elsewhere and toughening economic conditions have meant that HMRC is seeing persistent avoiders looking for alternative ways to get round other loophole closures, and to save money by avoiding tax.

Exploitation of the repayment rules has been around for many years and become common practice. Leakage of tax through that route also needed plugging for the closure of the other loopholes to be effective. Further, just 15 cases over the past three years have accounted for tax at stake of more than £8 million.

As for how many incidences of avoidance these loophole-closing measures are addressing, for the first two loopholes, HMRC estimates that more than 5,000 companies have a relevant structure in place and loans from those companies to relevant partnerships are, on a central estimate, in the low hundreds of millions. On the third loophole, a recent article in Taxation magazine described the practice of repaying loans to prevent the tax from becoming payable followed shortly by a new loan as

“reasonably common practice among smaller private companies”.

Complete figures are not available because the avoidance can be difficult to detect. The nature of the structures means that only some instances were disclosable under DOTAS, as I mentioned earlier. With regard to whether the schemes are marketed, some are, but most are not.

The hon. Lady asked what attempts HMRC had made to challenge the schemes before the measures were introduced. HMRC has applied the statute as far as it can. Some arrangements have fallen outside the specific wording of the legislation and that is partly why there is a need to take further action.

The hon. Lady also referred to the concern raised by the Chartered Institute of Taxation that there is a targeting of LLPs and all partnerships with company partners. The rules regarding loans to partnerships are simply being aligned, so that a loan to any partnership that has a partner who is also a shareholder of the company making the loan will be caught. HMRC has become aware that increasingly structures were being put in place to minimise income tax, but the specific structure chosen was meant to ensure that the tax charge on loans to participators did not arise either.

Regarding the repayment rules in chapter 3B, the amendments that we have included address the queries relating to year-end. That is part of their purpose.

As for whether “benefit conferred” is rather wide in meaning, and the concern that innocent transactions might be caught and the safeguards that exist within the general anti-abuse rule do not apply in those circumstances, the meaning is necessarily wide as this is an anti-avoidance measure. It is aimed at any payment by a close company that ends up in the hands of an individual participator without an appropriate tax charge. Specifically it should catch capital contributions to partnerships and the company’s share of a partnership profit which are left undrawn by the company where participators then draw those funds out of the partnership. It will not catch innocent transactions as it requires there to be an  avoidance purpose. “Benefit conferred” does not have the same meaning as for the income tax legislation; it is aimed at any extraction of value from a company by a participator in a form which avoids the tax charge on loans made by close companies to their participators or creates a tax advantage to the participator. I hope that reassures the hon. Lady and the Committee as a whole.