Section 660 Ruling Does Not Need Further Clarification, Says Revenue

by Robert Lee, Tax-News.com, London

08 November 2004

The UK’s Inland Revenue is refusing to fund a legal appeal that will help clarify changes to tax law for small businesses, the Daily Telegraph reported on Friday.

It has been estimated by the accounting industry that the decision in the Section 660 case which centred on the Revenue’s new interpretation of income distribution rules within small family businesses, may affect up to 200,000 firms in the UK, which could face fines of up to £9,000 each if the ruling stands.

However, according to Simon Juden of the Professional Contractors Group, the Revenue deems the outcome of the case against Geoff and Diana Jones, whose company Arctic Systems was the subject of the landmark ruling, not “of significant interest to taxpayers as a whole” to warrant the costs of an appeal, although it has often supported appeals 'in the public interest' in the past.

"It's frankly staggering that the Revenue can take this view when it is absolutely clear that the implications of this case for hundreds of thousands of people are enormous," remarked Juden.

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