TaxPersonal TaxProfession attacks couples tax

Profession attacks couples tax

Paymaster general Dawn Primarolo is under pressure to relax a tax assault on family-run businesses following last week's meeting between the Inland Revenue and the professional bodies.

Link: ‘Husband and wife tax’ under discussion

Seven organisations joined forces in an unprecedented display of unity to influence the Revenue’s controversial interpretation of the so-called ‘husband and wife’ tax, Section 660.

More than 200,000 family-run businesses could be caught by S660, should the Revenue pursue the legislation vigorously.

‘I think there is scope for movement,’ said John Whiting, former president of the Chartered Institute of Taxation. ‘We should get a definition of who is really caught, and get that number down to about 1,000.’

Mark Lee, chairman of the ICAEW tax faculty, said: ‘The Revenue reluctantly accepted that some of their examples describe very innocuous situations as if they were objectionable. We hope the strength of feeling is such that they will issue clarifying guidance.’

But the situation is likely to step up a gear next year if, as expected, one company takes its fight to the courts. Anne Redston, tax partner at Ernst & Young, said the case is ‘likely’ to be heard within six months.

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