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| CURRENT SECTION :: Section 660 / S660 | |
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Revenue demands on husband and wife enterprises have been accelerated because of new disclosure requirements on the share dealing process for smaller companies. Accountants and business groups have already condemned what is seen as a branching out of the old Revenue system to target partnership enterprises through S660A legislation. The extra details required insist that any share transactions between directors and employees must be declared to the tax collector under Form 42 compliance. Chas Roy-Chowdhury, tax adviser to the Association of Certified Chartered Accountants, said: “Our understanding was that the form basically required information about share options. The information we now have is that is actually much wider. “The object is to capture much more information that could be used to see whether there needs to be a change in the law covering husband and wife partnerships.” His comments reflect the Revenue’s quick response to the Jones case - financed by the Professional Contractors Group, a husband and wife enterprise, running Arctic Systems who have been contesting a £42,000 tax bill amid share dealing scrutiny. Roger Williams, tax partner at Wilkins Kennedy, said the Revenue has never before asked for share dealing data, “so you have to wonder why it is asking now.” He explains: “Intelligence gathered from Form 42 about company share transactions would certainly be useful if the Revenue wanted to identify the husband and wife companies that is accused of abusing the dividends system and move against them systematically.” The IR enforced there are no revisions under the law and it admits it is not specifically targeting smaller businesses run by married couples. Yet, professionals remain concerned that the authorities may want to short circuit procedures meaning S660A cases can only proceed with approval from special commissioners. The IR sent out its share-dealing Form 42 on June 8 with a 30 day period for submitting data and £300 punishments ‘per every reportable event’ for failing the deadline. Technical problems with IR online means the deadline for share disclosure is to be extended until September 7, 2004. Previous Page
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