Section 660 win for Qdos consulting

IR35 Test

A freelance IT contractor has been subjected to a Section 660A investigation and won. Section 660 - the so-called business tax between married couples and partners - has been the subject of much controversy and uncertainty since the Revenue started clamping down on what it perceived to be a 'loophole'.

This case concerns a small family company, with an annual turnover of a little over £100,000, run by a husband and wife who are the only shareholders. The investigation began in September 2003, with an enquiry into the wife's personal Tax Return. The Revenue's questions originally concerned remuneration, then quickly turned to investment income. The company's accountant suspected that a Section 660A investigation was afoot, and he advised the Company Director to consider dissolving his company and forming a new company with a different share structure. This was a signal for the director to contact Qdos to claim on his tax investigation insurance policy.

The case was allocated to Keith Preece, one of Qdos' Senior Tax Consultants who wrote to the Revenue, providing the information that the Revenue had requested, concerning the wife's shareholdings and remuneration, and giving the Revenue a comprehensive account of the wife's involvement in the business.

Two months elapsed and having sent a reminder back came a letter: the case had been submitted to the Inland Revenue Trusts Director's office at Bootle, where the Revenue's Section 660A "Technical Adviser" resides. Another fortnight passed by and the Revenue wrote again: the investigation had been dropped. Relief all round! Fortunately they were insured with Qdos Consulting.

Source: Shout99

Editors note (Feb 2012):
The original settlements legislation dates back to the 1930s and was subsequently updated first in 1988, when it became the more familiar Section 660. It was changed again in 2005 when it was updated and rewritten into its current form as Section 624 of the Income Tax (Trading and Other Income) Act (ITTOIA) 2005. See more information on the current settlements legislation.


Alliance Accountants

Published: Wednesday, May 12, 2004

© 2014 All rights reserved. Reproduction in whole or in part without permission is prohibited. Please see our copyright notice. If you want to use any content you have seen on this site then please request our media pack and ask for details of our Content Licencing Service.

Inni Accounts


Readers Comments...


  
Bookmark and Share
  
     
  

Section 660

Related Guides

Section 660

  
  

Latest Site Updates

ContractorCalculator: Contracting news in brief – 1/Aug/2014 ContractorCalculator: Contracting news in brief – 1/Aug/2014

News this week covers: IT contracts increase; OTS employment review; Mayor supports 15 for 2015; day rates top £1,500; & HMRC targets loan schemes.

Contractors may see simpler expenses rules from consultation, but not until post-2015 Contractors may see simpler expenses rules from consultation, but not until post-2015

Contractors can anticipate simpler rules on expenses and subsistence following a new Treasury consultation, but changes won’t happen until after 2015.

Contractors may benefit from OTS employment status review, which could affect IR35 Contractors may benefit from OTS employment status review, which could affect IR35

Contractors could benefit from the findings of a review of employment status initiated by the Office of Tax Simplification, due out for Budget 2015.

Extracting profits tax efficiently from a limited company Extracting profits tax efficiently from a limited company

Contractors can choose from a range of strategies to extract profits tax efficiently from their limited company, explains Abbott Moore’s James Abbott.


  
  

Twitter

Follow Us On Twitter


  
     

  
  

Contractor solutions

Contractor Angels Orange and Gold Accountancy Limited IR35 Test Clever Accounts Accountants Checklist Alliance Accountants Contractors Handbook
  
  

Contractor solutions

Need an accountant?

Comprehensive service for £59 per month. Call now for a FREE consultation.

Contractor Angels

More than just an Umbrella. Retain up to 90% of your earnings.

Parasol

The UK’s largest employment organisation - 0% risk, 100% compliance

InTouch Accounting

Perfect mix of technology & personal service for only £92 per month.

Contractor Accountant

Free consultation, incorporation and IR35 reviews. Find out more…

Clever Accounts

Complete contractor accounting service. 24/7 online access. £69 pm!

NA D J Colom Accountants Bedouin Group Contractor Financials NewsNow
  
Caprica Accountants Contractor Angels Contractor Insurance Life Insurance

  

The UK's leading contractor site. Independently audited traffic (ABC) – 131,456 monthly unique visitors.