Husband and wife tax case underway today
The Inland Revenue will today take on a small IT consultancy over a £42,000 tax bill, which could have massive repercussions for up to a million small businesses.
Arctic Systems, run by Geoff Jones and his wife Diana, case came to public attention after it was hit by unexpected demands for six years of back-tax on dividends they had taken from their business.
The legislation in question is the notorious Section 660 rule, which has been universally slammed by the profession.
The Revenue will argue that income paid on such things as dividends, received by a non-earning spouse or other connected person, should be taxed as the main fee-earner’s income.
The couple is being represented by the Professional Contractors Group.