Arctic Systems case 'cost taxpayers over £500,000'

British taxpayers are facing a bill of over half a million pounds for the cost of the taxman pursuing Arctic Systems Ltd over the controversial settlements legislation.

The cost of the landmark case, which the IT contractor company eventually won, has been calculated by the Professional Contractors Group, the freelance trade body.

But in a statement last night, the PCG said that despite chasing the couple for four years, the government claims it doesn't know the total cost of the case.

Costs were awarded against the taxman at the House of Lords hearing earlier this year, leaving the taxpayer to foot the bill because HMRC says it was not a 'test case.'

"It beggars belief that this amount of money [£500,000-plus] could have been spent in pursuit of a £7,000 tax bill," said John Brazier, PCG's managing director.

"We already know the human cost in terms of the years of stress for Geoff and Diana Jones, and we now know the true financial cost to the British taxpayer."

The Government says it doesn't know the full cost of the case, partly because no records were kept of the time of overheads relating to HMRC employees who were working on the case.

Questions were recently raised in parliament by Mark Prisk MP, but in vain.

He said: "While hundreds of thousands of small family businesses struggle under the weight of red tape imposed by the taxman, the very same organisation appears to be incapable of the most basic record keeping.

"One can't help but wonder if this case and its associated costs starkly illustrate the gap between the Revenue and people who are trying to run businesses properly and efficiently."

Mr Brazier added: "PCG has always campaigned for consistency, clarity and common sense in tax legislation. This case shows that there is next to no clarity and even less common sense."

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