TaxPersonal TaxE&Y lashes Revenue over Arctic case

E&Y lashes Revenue over Arctic case

Firm questions why HMRC took on contractors in the first place

Big Four firm Ernst & Young has slammed
HM Revenue & Customs for contesting
the
Arctic
Systems tax case,
after its appeal was defeated in the House of Lords
yesterday.

Patrick Stevens, tax partner at E&Y, said: ‘The outcome raises questions
about why HMRC decided to contest the case in the first place and create
enormous uncertainty for several years as the legal process was unravelling.

‘Even if there was some doubt about the correct interpretation of the law, it
had not been challenged by the Revenue for many years. It may have been far
simpler for the Revenue to change the legislation, if that was the desired
result.’

He also pointed out that because of the technical reasoning behind the
judgment, the tax benefits will only apply where it is husband and wife
shareholders and ‘not, for example, father and children’.

Further reading:

Taxpayers celebrate epic Arctic Systems victory

Arctic Systems: Geoff Jones talks of ‘terrible ordeal

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