TaxCorporate TaxArctic couple appeal against tax verdict

Arctic couple appeal against tax verdict

Arctic Systems', the small business involved in the landmark Section 660a 'husband and wife' tax case, is likely to see an appeal before the European Court of Justice, win or lose

The couple at the centre of the landmark Section 660A husband and wife tax case are to take their action to the Court of Appeal – and could, win or lose, take the matter to the European Court of Justice, according to the Professional Contractors Group.

Link: Arctic Systems loses landmark test case

The PCG, which is supporting and funding the Jones’s in their case against HM Revenue and Customs, said that even if the decision went against the couple, it could go as far as the ECJ.

‘Both parties believe they are right and, win or lose, either side could take the case to the European court to settle the issue’, a PCG spokeswoman said.

The PCG, that has asked the court for an expedited or fast track hearing so that a result can be reached ‘by the time people fill out their self-assessment forms’, said it would support Geoff Jones of Arctic Systems in taking his landmark S660A case against Revenue and Customs to the Court of Appeal.

The case was originally heard by the special commissioners in June last year and appealed at the High Court in March this year, however, the presiding judge, Mr Justice Park delivered his decision on 27 April, dismissing the Jones’s appeal.

The action concerns the tax treatment of dividends paid to spouses in family-owned businesses. It affects the rate at which dividends paid to a lower-earning spouse should be taxed at; at their own marginal rate or at the rate of the main earner.

PCG chairman Simon Juden said the PCG was campaigning for ‘clarity, consistency and common sense’ in regulation and legislation. ‘Both parties want a quick conclusion to the matter and we are 80% sure the case will come to court in September or October later this year. ‘We believe that this judgment undermines the self-assessment tax system by leaving a host of questions unanswered.

‘It could affect hundreds of thousands of small family businesses who’ve shared the risk and hard work of running a business, expecting to share in the rewards’, Juden added.

The PCG is being supported by tax barrister James Kessler QC, who believes that family businesses are being put in an impossible situation over the issue of S660A.

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