Thousands of small business owners comprising husband/wife teams face back taxes averaging £9,000 following a High Court ruling reports The Daily Telegraph.
Accountants estimate some 200,000 such firms face the tax claim after the court rejected an appeal by West Sussex IT firm Artic Systems, although the Inland Revenue estimate puts the figure at about 30,000 businesses.
”Mr Justice Park said family firms could not reduce their joint tax bill by paying a depressed salary to the main breadwinner and then distributing profits in dividends equally between the spouses,” the paper writes.
”Mrs Jones, the company secretary who worked four hours a week, acquired her £1 share. But the judge said that even if Mr Jones, the company's chief fee earner, had gifted a half share in the business to his wife, dividends paid to her would still be taxed at his higher tax rate.”
HOME EVICTIONS could rise by 35% this year as the result of higher mortgage payments hitting thousands of homeowners, says the Telegraph.
It reports on figures released by the Department for Constitutional Affairs showing more than 14,000 people have been made subject to court order in the first quarter this year – meaning the highest number of people could lose their homes since 2000.
Some 11.5m home owners are being urged to look over their finances following a series of base rate rises that have left finances of families in particular stretched “to breaking point”, the paper says.
Nearly 26,000 court actions have been started in the first quarter this year by banks and building societies related to mortgage lending, up 35% on the same period last year and the highest figure since 1997, the paper adds.
YESTERDAY’S APPOINTMENT OF Margaret Cole as the new FSA head of enforcement signals the regulator is taking a tough line, writes The Times.
Cole replaces David Mayhew, who himself stepped in temporarily in January after former enforcement boss Andrew Procter left for a job in the City.
”City lawyers, while applauding Ms Cole’s tenacity and litigation skills, said that the appointment might intensify the increasingly adversarial approach of the FSA,” The Times reports.
THE SCOTSMAN IS asking the question of just who among Standard Life’s members will qualify for shares when the company floats.
The question comes about because of the gestation period between the company’s announcement it intended to float and the time it actually takes place: The Scotsman estimates that between 150,000 to 180,000 policies will have matured over that two-year period, out of some 2.6 million policyholders who should be able to count on some sort of shareholding.
For those policyholders who suffered three years of bonus cuts to then be left without any shares even after saving for 25 years will create an “acute” sense of grievance, the paper writes.
”A major issue in forward planning for those whose policies are set to mature over the next year is whether they can "park" the proceeds in a Standard Life product - such as a with-profits bond - that would preserve their membership entitlements long enough to qualify for shares.”
”Arrangements along these lines were put in place for previous demutualisations, such as Friends Provident. But the current picture at Standard Life is much less clear.”
At the company’s annual general meeting two days ago finance director John Hylands specifically warned against putting in place such arrangements, the paper says.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Jonathan Boyd on 020 7484 9769 or email [email protected].IFAonline
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