Inland Revenue representatives have met with senior members of the accountancy profession to discuss controversial tax legislation Section 660.
As revealed by Accountancy Age on 3 July, highly influential members of the profession along with tax advisers and the major institutions hope to sway some influence with the government over what they see as unfair treatment of family-run businesses.
Section 660, the so-called husband and wife tax, penalises dividend-based payments to spouses if the receiving spouse does not own a significant share of the business.
While the legislation is not new, the professional bodies are concerned with the increasingly aggressive stance taken by the Revenue, specifically in the form of retrospective claims.
The Revenue can back-claim tax for up to six years in arrears if it feels tax has been avoided by the taxpayer. It is this six-year retrospective element of the Revenue’s tactics that have incensed most of the profession.
Accountancy Age understands the meeting took place yesterday hoping to make progress on the concerns over the legislation.
And one of taxpayers’ biggest worries is uncertainty because of claims that the Revenue has been less than clear with its stance on the legislation.
The Professional Contractors Group is also expected to be taking part in what are expected to be difficult negotiations. Earlier this year it wrote to paymaster general Dawn Primarolo asking her not to backdate the rules, and criticising the uncertainty of the Revenue’s approach.
A spokesman for the Inland Revenue confirmed a meeting had taken place yesterday ‘with some representative bodies’.
‘The meeting was designed to enable the bodies to explain any concerns they have about the way legislation at S660A should operate. The Department regularly meets with representative bodies to ensure legislation is being applied as it was intended to,’ the spokesman added.