Yesterday, Geoff and Diana Jones of Arctic Systems lost their landmark Section 660A appeal, which was heard by Mr Justice Park at the High Court last month and supported by PCG.
The ruling could effect ten of thousands of small businesses, with potential tax bill of up to £42,000 for husband and wife businesses.
News round up
Here's a round up of the news to date:
BBC - Small firms face higher tax bills
A High Court ruling in favour of HM Revenue & Customs (HMRC) may mean bigger tax bills for thousands of small, family-run businesses.
PCG - Tax blow for family businesses as PCG member loses landmark case
This is a bitter blow to the hundreds of thousands of small family businesses who’ve shared the risk and the hard work of running a business, expecting to share in the rewards. Now many of them will frankly be wondering whether it’s worth it.
AccountancyAge - 660A decision may not apply to all
The High Court's ruling on the Arctic Systems case may not be applicable to all family businesses, accountants said today.
Ross Martin Tax Consultancy - 660A
The repercussions from the case are set to be enormous and long lasting without a change in the underlying legislation.
Futher Information
Section 660 Calculator : How much could Section 660 cost you?
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.