Revenue Attacks Family Businesses

The Professional Contractors Group (PCG) have reported that S660A ICTA 1988 - the "settlements legislation" - is increasingly being (mis)interpreted by elements within the Revenue to say that the spouse of a contractor who owns shares in the business but does not work for the business may not receive dividends from it.

It is thought that this step may have been taken by the Revenue without Government backing. PCG has raised this as a matter of urgency at the latest of its regular meetings with Revenue officials, and with a number of its ministerial and shadow Cabinet contacts.

This unprecedented assault on small family businesses will be regarded by many as an attack on the principle of independent taxation and womens rights to hold shares.

PCG Chairman Jane Akshar said "The Revenue are basically saying that to receive dividends from a company you own shares in, you should do work for that company. This is not only patently absurd but counter to their own rules on composite companies, where dividends received in proportion to work done are punitively taxed. They can't have it both ways. We are asking Paymaster General Dawn Primarolo to intervene as a matter of urgency."

PCG is also ready to take S660 test cases through the Courts on behalf of members should that prove necessary.

More information on the PCG can be found on their website www.pcg.org.uk

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