Section 660 - Guidance note on the settlements legislation

Click here for Hiscox Business Insurance

IT Contractor Mortgages
Contractor specialists - loans based on contract rate - Find out more.

Section 660 - Guidance note on the settlements legislation

Published on Jan 19, 2006

The six main UK representative bodies involved in tax have issued an updated guidance note (PDF) to help tax advisers and their clients with their tax returns for the year ended 5 April 2005. This is to assist with self assessment in light of the Court of Appeal decision in the Arctic Systems Limited case (Jones v Garnett), where the Court found in favour of the taxpayer but which is now being challenged by Her Majesty's Revenue & Customs (HMRC).

Francesca Lagerberg, Chairman of the Tax Faculty of the ICAEW, noted:

"The disappointing decision by HMRC to petition for leave to appeal to the House of Lords maintains a sense of limbo for many small businesses, particularly those involving just a husband and wife, who will remain concerned about how to accurately complete their tax returns in relation to the settlements legislation."

Anne Redston of the Chartered Institute of Taxation added:

"The recent Court of Appeal decision in the Arctic Systems case was strongly in favour of the taxpayer, but the spectre of an appeal by HMRC will worry small businesses. The guidance note issued today by all the main tax representative bodies is intended to help with this dilemma."