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SME tax case goes to the Lords

Published On 6 June 2007 at 12:44:49

The Federation of Small Businesses (FSB) has backed a small business as its case against HM Revenue & Customs (HMRC) is heard in the House of Lords.

In the case, which began yesterday (June 5th), HMRC is seeking to obtain extra tax from Geoff and Diana Jones - the owners of Arctic Systems.

HMRC feels that the couple underpaid tax because Diana Jones received a small salary, but then a large dividend from the company. However, the Court of Appeal ruled in favour of the taxpayers earlier this year.

This ruling did not satisfy HMRC and it took the case to the House of Lords.

Now, the FSB has come out in support of the small business owners. Its taxation chairman, Bill Knox, said: "HMRC's conduct towards a family-run business in this case is utterly shameful.

"They refused to respect the decision of the Court of Appeal, which delivered a decisive and authoritative ruling in favour of the taxpayer.

"Hounding hardworking small business owners in this way sullies the good name of HMRC and will not instil confidence in the UK small business community as a whole, which rightly expects to be treated proportionately and fairly by the tax authorities."

According to the BBC, a decision in favour of HMRC could mean that up to 30,000 other small businesses could be faced with large, back-dated tax bills.

 

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