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Taxpayers face 500k bill over Arctic Systems case

Published on Oct 25, 2007 |

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The Professional Contractors Group has learned that even though British taxpayers are facing a bill of over half a million pounds for the cost of the taxman pursuing a small family business through the courts over a disputed £7,000, the Government claims it doesn't know how much the case has cost.

The PCG, which represents IT Contractors and Freelancers in the UK and supported Geoff and Diana Jones in their appeal against HM Revenue and Customs to the House of Lords, believes the total cost of the case will be in excess of £500,000.

Costs were awarded against HMRC at the hearing earlier this year, which means the taxpayer will foot the bill. You can read the background to the "Husband and Wife" court case here.

The PCG's MD, John Brazier, said, "It beggars belief that this amount of money could have been spent in pursuit of a seven thousand pound tax bill. 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."

Meanwhile, the Government has revealed that it doesn't know the full cost of the case, and admitted that no records were kept of the time and overheads relating to HMRC employees who were working on the case.

Questions were raised in Parliament by Mark Prisk MP, who said, "While hundreds of thousands of small family businesses struggle under the weight of red tape imposed by the tax man, 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."