Arctic Systems - Appeal Against High Court Decision

On the 8 June 2005 an appeal was lodged against Mr Justice Park's decision in the high Court dated 27 April 2005. This is a brave move by Geoff Jones to continue his fight to challenge the Revenue's opinion that the dividends from his company paid to his wife should be assessed on himself.

The case will now be heard by the Court of Appeal and the outcome is again eagerly awaited by many in the business community who may be affected by the final decision.

Should either side disagree with the Court of Appeal decision the final port of rest for Arctic would be the House of Lords.

The decision to take the matter further is presumably based on the fact that the two Special Commissioners disagreed so fundamentally, clearly illustrating that there is a clear case for disagreeing with the Revenue opinion, as one Special Commissioner indicated.

We must again wait for the final outcome, which extends the period of uncertainty for those concerned. We must also note that the comments of Mr Justice Park will not now carry the same 'weight' had his decision not been subject to appeal. Again businesses are faced with the decision of what action they should take in the meantime. It may be prudent for those affected to still give some regard to Mr Justice Park's comments with regard to market value of the contribution of both directors.

It would be of great benefit to all if the Revenue would finally accept the lack of clarity of S660A and also the unfairness of taking their attack on businesses before April 2003 and Tax Bulletin 64. It is obvious that the wording and interpretation of S660A is less than clear and so it would be of assistance to all concerned if new legislation was drafted to become law in April 2006. This would hopefully leave us with a set of understandable rules for the future and remove the uncertainty of those businesses that are currently subject to a challenge from the Revenue under the current 'grey' S660A legislation.

Qdos will continue to monitor the progress of S660A and will continue to provide updates and guidance.

Article by Carl Whittaker - Qdos Consulting

Qdos Consulting are experts in Settlements Legislation and are able to offer a detailed Compliance Review and an opinion on whether you would be successful if challenged by the Inland Revenue. The cost for this is only £150 pa (plus VAT).

If you are deemed to be non-compliant, you will be advised on the course of action to take.

Qdos are also able to offer TLC660a insurance cover against potential tax liabilities or professional representation insurance only if required.

A Compliance Review can also be backed up by a comprehensive insurance for yourself and your business against the consequences of a Revenue investigation into your status under the Section 660A regulations. The cost for this is £325 (inc. IPT).

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Posted 27/06/05

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