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FSB attacks HMRC’s bullying tactics in family tax case

19 January 2006

The FSB has strongly attacked HM Revenue & Customs’ (HMRC) decision to petition the House of Lords over a small business tax ruling that went against them.

The case centres on a family-run small business, Arctic Systems Ltd, which used dividends from the business to remunerate Geoff and Diana Jones, the shareholders.

Despite a decisive victory in favour of the taxpayer in the Court of Appeal and a refusal by that court to give leave for an appeal to the House of Lords, HMRC announced that they will petition the UK’s highest court.

Simon Sweetman, FSB Tax Spokesman, said:

“HMRC’s hard line attitude to a family-run business in this case is very worrying and doesn’t instil confidence in the UK small business sector, which rightly expects to be treated proportionately and fairly by the tax authorities.

“We are disappointed to see that HMRC has refused to respect the decision of the Court of Appeal, which delivered a decisive and authoritative ruling in favour of the taxpayer in this case.

“HMRC’s decision to take the case further comes at the worst possible time for family-owned businesses, which now face deep uncertainty in the run-up to tax-filing obligations at the end of this month.”



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