PracticeAccounting FirmsArctic costs balloon in ‘test case’

Arctic costs balloon in ‘test case’

Costs balloon in landmark husband and wife ‘test case’

The Professional Contractors Group will have to pay ‘tens of thousands’ more
to take the Arctic Systems case to appeal. The group said last week that it
planned to appeal the High Court ruling in the case, which threatened to set a
precedent for thousands of family businesses.

Link:
Arctic couple appeal against tax
verdict

The High Court ruled recently that dividends from small IT consultancy Arctic
Systems, paid to the lower-earning spouse, should be taxed at the rate of the
higher earner. The Inland Revenue alleged the only reason Mr Jones was paid so
little was so that a higher dividend could be paid to Mrs Jones, thus avoiding
higher-rate tax charges on his income.

The government is not funding both sides of the case, as it does not believe
that it is a test case. But Simon Juden of the PCG disagreed. ‘It is quite
clearly a point that requires wider clarification,’ he said. The appeal will
cost the PCG ‘tens of thousands more’, he said, and the PCG could also end up
footing a similar bill for the Revenue’s costs.

Small family-owned businesses are closely following the case for indications
of how best to conduct and report their own tax affairs. Some advisers have
suggested the case could affect up to 200,000 businesses. The case is set to be
heard in September. ‘Both parties believe they are right and, win or lose,
either side could take the case to the European court to settle the issue,’ a
PCG spokeswoman said last week.

A spokesman for the Revenue said the department did not comment on
‘individual cases’.

Related Articles

Productive accountancy firms lead the way

Accounting Firms Productive accountancy firms lead the way

11h Simon Adcock, HSBC
LLPs in Top 50+50: Will LLPs continue to be the preferred set-up?

Accounting Firms LLPs in Top 50+50: Will LLPs continue to be the preferred set-up?

1d Fergus Payne, Lewis Silkin
BDO’s global revenues pass $8bn

Accounting Firms BDO’s global revenues pass $8bn

1w Alia Shoaib, Reporter
Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

Accounting Firms Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

1w Philip Smith, Reporter
Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

Accounting Firms Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

2w Emma Smith, Managing Editor
BDO reports revenue growth of 5.7%

Accounting Firms BDO reports revenue growth of 5.7%

2w Alia Shoaib, Reporter
Taylorcocks announces merger with Surrey firm

Accounting Firms Taylorcocks announces merger with Surrey firm

2w Emma Smith, Managing Editor
Kingston Smith reports 7% gender pay gap

Accounting Firms Kingston Smith reports 7% gender pay gap

3w Emma Smith, Managing Editor