The decision of the courts to find in favour of the Jones' in the Arctic Systems husband-and-wife tax case has led to many words of congratulations today, however, some have warned that HMRC could appeal against the decision in the House of Lords
‘The Revenue may be able to appeal to the House of Lords (they will need
consent to do so); or of course they may change the law. It’s reasonable to
expect that any change will not be retrospective,’ according to David
Whiscombe of the UK200Group Tax Panel, and partner at Berg Kaprow
Lewis, commenting on today’s ruling.
Glenn Collins, ACCA head of business advisory services,
said: ‘This is a welcome decision by the Appeal Court. We are particularly
pleased that a wife’s contribution to a family business has been recognised.’
But he warned: ‘This ruling at least allows affected business owners to
complete their tax returns by 31 January with some certainty. But the Revenue is
seeking leave to take this case further to the Lords, which will once again
leave a cloud of uncertainty over businesses which want clarity on their tax
arrangements so they can plan ahead.’
James Ferguson, tax partner at Deloitte, said: ‘The Revenue
has previously intimated their intention to pursue their argument through to the
House of Lords should that be required. Accordingly, absolute certainty will not
be achieved until either the Revenue decide not to appeal after all or the House
of Lords settles the matter once and for all.’
Narinder Paul, tax partner at KPMG, said: ‘This is an
excellent outcome for the taxpayer and the result of a very tough, drawn-out and
expensive campaign fought by the couple involved. What this does for
husband-and-wife owned small businesses is actually preserve the situation that
existed before the extra tax liability was imposed. I’m sure there will be
thousands of smaller businesses up and down the country celebrating this ruling.
It is the common sense approach.’
‘This is another sensible decision from the courts and, with the
self-assessment deadline only six weeks away, a timely one,’ said Paula
Tallon, director and head of direct tax at Chiltern. ‘This was a test
case and many accountants and their clients will think of this as an early
Christmas present. There are many thousands of companies like Arctic Systems in
the UK, all of whom will have been anxiously awaiting this verdict. Who says
Santa doesn’t exist?’