Family run businesses across Wolverhampton
will be breathing a sigh of relief this week according
to local accountants and business advisers AGS, following
the latest development in a landmark tax case.
Wolverhampton based AGS has welcomed
the news that Arctic Systems has won its tax case against
HM Revenue and Customs, a decision that could allow 'husband-and-wife'
businesses to share their tax burdens instead of facing
a huge tax bill.
Steve Aston at AGS comments: "When
Geoff and Diana Jones of Arctic Systems originally lost
their Section 660A appeal local business men and women
feared they could face huge tax bills. The news that their
appeal has been won is therefore very welcome.
"There are still a number of uncertainties regarding
cases of this nature, for example how the rules relate
to partnerships, or if the spouse in question did not
actually contribute to the business at all. However this
news is a step in the right direction and we’re
confident further clarifications will be made public in
due course."
The Court of Appeal found in favour
of Arctic Systems in their appeal against the previous
High Court's ruling in favour of HM Revenue & Customs'
interpretation of the s660a settlements legislation. The
court ruled that the dividends paid to Mrs Jones were
not classed as settlements, as HMRC had claimed.
The case dates back to April 2003 when
Arctic Systems, a computer business run by Geoff and Diana
Jones, was picked out by the Revenue which claimed the
husband and wife team owed £42,000 in tax dating
back over six years.
The Section 660A appeal, revolved around
the tax regulators' objection to the way Geoff and Diana
Jones, of Arctic Systems, used their salaries and dividend
payments to reduce their joint tax bill.
For more information contact AGS on
01902 717 175.
