Interpretation of couples tax to be reviewed

Link: The Debate: Revenue’s approach to married couples

Accountancy Age understands that representatives from the major professional bodies and lobby groups will sit around a table with Revenue staff to try and find some common ground.

Top of the list of priorities is expected to be the technical issue of whether the Revenue is correct in its interpretation of the rule.

The Revenue practice of chasing up retrospective tax claims should also receive attention after Geoff Jones of IT consultancy Arctic Systems received a tax claim of £42,000, which was backdated for six years. He is now facing bankruptcy and is determined to take his case in front of Revenue special commissioners.

A spokesman for the Professional Contractors Group, which is backing Jones in his fight, said his request was ‘still going through the system, but hasn’t progressed very far’.

Should Jones’ case be heard before the special commissioners it could well become the test case for any future conflicts with the Revenue. If the Revenue’s aggressive stance is maintained, it could lead to many more cases going to court.

Pressure is beginning to mount on the government over its stance on section 660. Last month, a number of industry bodies met with the Department of Trade and Industry, which is said to be taking an interest in the matter.

With the PCG, the Federation of Small Businesses also sent a letter to paymaster general Dawn Primarolo to express concern over the Treasury’s increasingly aggressive approach.

Although a response was received, a spokeswoman for the FSB said it simply reiterated the paymaster general’s stance and that it ‘hasn’t relieved any of our fears at all’.

Primarolo said in a letter to a member of parliament: ‘This is not a new policy nor a change of policy as has been suggested – the Revenue has been applying the legislation in this way for a number of years.’