Section 660A now targeting celebrities and groups

The Section 660A debate continues to widen with The Times reporting that celebrities and TV stars are also being targeted under Section 660A and Accountancy Age reporting that even larger groups of family businesses are being affected.

In their 11 May issue, The Times online reports that several celebrities and TV personalities are finding that their family owned management companies are also being attacked by the Revenue using Section 660A (see here

The Times )

It was only a matter of time before Section 660A was used against celebrities who operate via companies. Like many knowledge based freelancers they are also often in the position of having a low asset value and having the income earned exclusively by one worker. Amongst the celebrities affected by this is green fingered Alan Titchmarsh who has shelved plans to involve his wife in his business. However many others could be affected in any situation where dividends are being shared with a spouse or partner who is a lower rate tax-payer.

Perhaps less expected is the Revenue's use of Section 660A to attack larger companies. This was reported by Accountancy Age (see here

Accountancy Age), on 8 May 2003. They cite evidence that the Revenue is also focusing on businesses using 'management companies' set up to run a group of small enterprises. This is an arrangement that is common among small businesses. If a spouse holds a share, and receives a dividend from the management company, the Revenue is now looking to tax the dividend as income of the main earner.

Kevin Miller FCA