Tax barrister supports Section 660 case

With just a couple of weeks to go before the High Court appeal into the Section 660 test case, a leading tax lawyer has explained his reasons for supporting the case put forward by the IT freelancer company, Arctic Systems.

Geoff and Diana Jones, who own Arctic Systems, lost their landmark Section 660 case at the Special Commissioners when the two Commissioners could not agree and one used her casting vote in favour of the Inland Revenue.

The outcome has considerable implications for hundreds of thousands of husband and wife businesses who are now awaiting the High Court appeal which is due to start on March 15.

James Kessler QC, a leading tax barrister, believes that small family businesses are being put in an impossible situation.

He said: "I think that the Revenue argument in the Arctic case is simply wrong in law as well as unfair. It would also be extremely difficult to operate because the Revenue is asking people to value the contribution of their spouse.

"That is an almost impossible exercise and will vary from year to year, depending on individual circumstances.

"In any one particular case, the amount of tax is not going to be large enough to justify an appeal and if people cannot afford to challenge the Revenue, then bad tax law results. As a tax lawyer, I want to see the tax system operated in a way that is right in law, and fair and workable in practice. The Revenue's ruling affects people who cannot afford to appeal on their own, so there needs to be a test case to clarify the law, for the benefit of everyone."

The appeal has been funded by individual donations and with the support of several organisations including the Professional Contractors Group, the Federation of Small Businesses, Berg Kaprow Lewis and the JSA Group.