HM Revenue & Customs And The Moving Goal Posts
There is a case before the House of Lords which has the potential to blow open the husband and wife business partnership arrangements which have been ongoing for many years. HM R&C have taken their claims to the highest court in the land, the House of Lords, to seek a favourable ruling in their fight to change the “interpretation†of existing laws.
The cases centres around Geoff Jones and wife Diana Jones who are fighting an additional tax claim from HM R&C, despite winning an earlier court ruling. The involves the practice of paying the low taxed member of the partnership in dividends, rather than paying the higher tax paying member in salary. This can have a very beneficial effect on tax charges for the couple as a whole and HM R&C are claiming that this is tax avoidance - even though the interpretation of the laws has never been questioned before.
HM R&C are claiming an additional £50,000 in tax payments from the couple who appear keen to take this all of the way, and protect their business arrangement which has been in place for many years. There are possible repercussions for the estimated 30,000 similar business partnerships in the country, with potentially hundreds of millions of pounds in back taxes at stake.
Whatever happens it seem as though this particular “tax loophole†may well be closed in the near future, with the government set to rake in millions of pounds in extra taxation.
You must be logged in to post a comment.