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Shout99 - Freelancers, FO35, Section 660
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Shout99 - Freelancers, FO35, Section 660
Shout99 - Freelancers, FO35, Section 660
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Income shifting proposals are 'conceptually retarded'
by The Editor at 11:53 26/02/08 (Section 660)
Trade group, the Professional Contractors Group (PCG), has condemned the Government's 'income shifting' proposals as 'conceptually retarded' in its formal response to the consultation on the measure.
PCG’s managing director John Brazier, said: “The Government’s plans rest on fundamental misunderstandings of basic business concepts such as profit, income and risk.

“They are trying to claim that any profits from a business must be taxed as the personal income of the individual within that business whose labour generated them: this is plainly absurd, and seems to be trying to say that hundreds of thousands of businesses are not businesses at all, but just individuals who should be treated as earning salaries.”

Unworkable
PCG’s response also criticises the proposals for being unworkable, and placing a disproportionate burden on family businesses, who will face a mountain of red tape simply to prove that they have complied with the legislation – irrespective of whether or not they actually owe any extra tax under it.

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Mr Brazier said: “We really hope the Government will see sense and reconsider its plans. Business bodies, tax experts, the thousands of people who’ve signed the e-petition and the MPs from all parties who’ve signed the Early Day Motion are all sending the Government a clear message that these proposals are not fair and will not work.”

PCG has also written to John Hutton, Secretary of State for Business, Enterprise and Regulatory Reform, asking him to instruct the Better Regulation Executive to look into the conduct of the consultation.

Mr Brazier concluded:“It has been clear from the start that the Government decided to legislate on the basis of no evidence whatsoever. Throughout the consultation, they have refused to discuss the principle of the legislation, even though their draft Impact Assessment admitted that they could not accurately quantify the problem they wanted to address – or even confirm that there was a problem at all.”

The PCG’s formal response can be downloaded from the PCG's website.

Background
The Government introduced its income shifting proposals after it was defeated in the Arctic Systems House of Lords case. Income shifting is the process by which a business is owned by a two connected people, usually husband and wife.

The Government claims that the dividends received by a person who is subject to a lower rate of tax and makes less contribution to the income of the business should be treated as 'shifted income' and taxed as if they had been received by the higher tax payer.

The new rules will come into effect in April 2008. They have been criticised by many parties as being too complex, unworkable and leave significant areas of uncertainty. There has been media speculation that they could be some degree of climbdown in the Budget as a result of the widespread condemnation of the proposals.

Shout99 has followed the events relating to Section 660 and income shifting. You can also read more about the background to this case and the issues at stake in Shout99's Section 660/Income shifting resource centre.

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The Editor

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Income shifting proposals are 'conceptually retarded' The Editor - 11:53 26/02/08
Shock headline: "Gov ignores sense" jacksjpt - 17:01 26/02/08
Honesty is the best policy jojo - 17:12 26/02/08
Well said John ... brianc - 06:29 27/02/08
Re: Well said John ... elojpx - 08:42 27/02/08
Re: Well said John ... Den-ny - 09:27 27/02/08
Well said Denny MARTINHJAMES - 16:27 27/02/08
Why make it more complicated .... brianc - 16:56 27/02/08
Re: Well said Denny burnetts - 16:58 27/02/08
Re: Honesty is the best policy charlescrane - 08:29 28/02/08
Is the Property Market going to hell ? brianc - 06:51 27/02/08
Re: Income shifting proposals are 'conceptually retarded' anthonyenglish - 09:16 27/02/08
Income shifting proposals are 'conceptually retarded' Petes_Pocket - 11:01 27/02/08
Re: Income shifting proposals are 'conceptually retarded' elojpx - 11:43 27/02/08
Re: Income shifting proposals are 'conceptually retarded' MarketFarces - 11:44 27/02/08
Income shifting proposals are 'conceptually retarded' Petes_Pocket - 16:57 27/02/08
Re: Income shifting proposals are 'conceptually retarded' asif9876 - 12:43 27/02/08
All this talk of 'they' jojo - 13:28 27/02/08
Glad you are so tenacious jojo - 12:47 27/02/08
Overpriced. Petes_Pocket - 13:17 27/02/08
Re: Overpriced. asif9876 - 13:26 27/02/08
Expect corruption jojo - 13:41 27/02/08
The competency difference jojo - 13:35 27/02/08
The competency difference Petes_Pocket - 13:44 27/02/08
Re: The competency difference jojo - 13:56 27/02/08
Re: Overpriced. rdale - 13:56 27/02/08
Overpriced. Petes_Pocket - 16:52 27/02/08
Re: Overpriced. asif9876 - 17:21 27/02/08
Overpriced. Petes_Pocket - 17:41 27/02/08
Re: Overpriced. asif9876 - 18:12 27/02/08
Overpriced. Petes_Pocket - 21:05 27/02/08
Re: Overpriced. asif9876 - 21:17 27/02/08
Re: Overpriced. btm - 06:53 28/02/08
Overpriced. Petes_Pocket - 08:47 28/02/08
Re: Overpriced. asif9876 - 08:55 28/02/08
Overpriced. Petes_Pocket - 09:11 28/02/08
Save it for your plumber jojo - 13:15 28/02/08
Re: Overpriced. Den-ny - 10:09 28/02/08
Re: Overpriced. asif9876 - 10:29 28/02/08
Re: Overpriced. Den-ny - 11:29 28/02/08
Re: Overpriced. btm - 09:12 28/02/08
Re: Overpriced. asif9876 - 09:16 28/02/08
Re: Overpriced. btm - 09:39 28/02/08
Overpriced. Petes_Pocket - 10:27 28/02/08
Re: Overpriced. asif9876 - 10:31 28/02/08
Re: Overpriced. Den-ny - 11:36 28/02/08
Fascinating jojo - 01:59 28/02/08
And talking of crowds jojo - 02:24 28/02/08
Re: Income shifting proposals are 'conceptually retarded' PAULSC - 17:09 28/02/08
Re: Income shifting proposals are 'conceptually retarded' Den-ny - 18:02 28/02/08
Re: Income shifting proposals are 'conceptually retarded' stillington - 20:37 28/02/08
Re: Income shifting proposals are 'conceptually retarded' Den-ny - 21:42 28/02/08
Re: Income shifting proposals are 'conceptually retarded' btm - 09:07 29/02/08
Re: Income shifting proposals are 'conceptually retarded' stillington - 15:51 29/02/08
Income shifting proposals are fair Petes_Pocket - 20:03 28/02/08
Re: Income shifting proposals are fair stillington - 20:55 28/02/08
Income shifting proposals are fair Petes_Pocket - 21:13 28/02/08
Re: Income shifting proposals are fair stillington - 14:15 29/02/08
Re: Income shifting proposals are fair PAULSC - 10:17 29/02/08
Income shifting proposals are fair Petes_Pocket - 10:45 29/02/08
Agreed jojo - 10:57 29/02/08
And let's not forget jojo - 11:59 29/02/08
Re: Income shifting proposals are fair ddavey - 11:41 29/02/08
Re: Income shifting proposals are fair asif9876 - 12:02 29/02/08
Please jojo - 12:33 29/02/08
"BA" not "BS" :) asif9876 - 13:08 29/02/08
You will become obsolete soon jojo - 13:23 29/02/08
Re: You will become obsolete soon asif9876 - 13:40 29/02/08
Also jojo - 13:38 29/02/08
Re: Also asif9876 - 13:41 29/02/08
Re: Also asif9876 - 13:48 29/02/08
Re: "BA" not "BS" :) pooleyr - 16:25 01/03/08
Re: "BA" not "BS" :) asif9876 - 19:45 01/03/08
Re: "BA" not "BS" :) pooleyr - 17:53 02/03/08
Re: "BA" not "BS" :) asif9876 - 11:02 03/03/08
Now describe an MP's "perks" jojo - 13:04 29/02/08
Re: Now describe an MP's "perks" ddavey - 13:23 29/02/08
Income shifting proposals are fair Petes_Pocket - 13:10 29/02/08
Your opinion of real business jojo - 13:27 29/02/08
Re: Your opinion of real business asif9876 - 13:43 29/02/08
I am not even looking jojo - 15:12 29/02/08
Re: Income shifting proposals are fair xpatjock - 10:02 03/03/08
Income shifting proposals are fair Petes_Pocket - 10:19 03/03/08
Re: Income shifting proposals are fair xpatjock - 12:49 03/03/08

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