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Family firms face tax clampdown

By newbusiness
Created 25/02/2008 - 11:03

Family firms are facing a government clampdown on the practice of income-shifting that could affect up to 300,000 companies.

The practice involves couples who jointly own a company splitting the profits between them in such a way as to minimise their tax exposure.

It has been a target for government legislation ever since HMRC lost the so-called Arctic Systems case in July 2007.

Legislation to outlaw the practice was introduced last month but has been criticised for being too heavy-handed.

"The whole attitude of HMRC and the government has been pretty draconian," said Simon Briault of the Federation of Small Businesses (FSB). "They're trying to make husband-and-wife firms operate on an arms-length basis and keep timesheets."

The FSB and the British Chambers of Commerce are lobbying for the matter to be addressed in the Budget on 12th March.


Source URL:
https://www.newbusiness.co.uk/news/family-firms-face-tax-clampdown