Landmark Arctic Systems case in Court of Appeal

A landmark two-day case to determine the tax position of thousands of
husband-and-wife companies under the ruling Section 660A began at 10.30 this
morning in Court 16 of the Court of Appeal.

The long-running case, which faces an appeal two working days before the
chancellor delivers his pre-Budget report, is between Arctic Systems, an IT
consultancy owned by Geoff and Diana Jones and HM Revenue & Customs.

The case focuses on the tax regulators’ objection to the way the couple used
their salaries and dividend payments to reduce their joint tax bill. Both sides
have pre-submitted skeleton arguments to the three law lords who will judge
case.

Malcolm Gammie QC will deliver the Jones’s arguments, while a representative
of the Revenue will deliver its side, then both parties will have a chance to
answer each other’s arguments. Sir Andrew Morritt, chancellor of the High Court
and the two other law lords will then retire and deliver a ruling in six to
eight weeks’ time.

Simon Juden, chairman of the Professional Contractors Group that is backing
Arctic Systems, said that he hoped the judgment would ‘come in time’ for the
self-assessment deadline of 31 January.

If the decision goes against the Joneses it is thought the couple could take
the case to the House of Lords.