HMRC issue further guidance on Section 660

by Susie Hughes at 11:37 28/03/06 (Section 660)

HM Revenue & Customs (HMRC) has issued further advice on Section 660 following the news that it will be allowed to appeal the Arctic Systems case in the House of Lords.

HMRC's guidance says: Jones v Garnett: Further advice We have been asked to issue advice on how those affected by the Court of Appeal decision in Jones v Garnett (known as "Arctic Systems") given on 15 December 2005 should complete their self assessment returns. We have been granted leave to appeal to the House of Lords, and the Court of Appeal decision cannot therefore be regarded as final. In the circumstances we believe it would be premature to reconsider the guidance and the examples we issued in November 2004 in A Guide to the Settlements Legislation for Small Business Advisers (PDF 178K) The correct time to do that is when the case has been finally resolved. Advertisement The Court of Appeal judgement represents the law as it now stands. It follows therefore that taxpayers whose circumstances are consistent with the situation in Jones v Garnett are entitled to self assess or, within the time limits allowed, amend a self assessment in accordance with that judgement. Clearly, each individual case is different and it is not easy to lay down a clear line which defines whether a case is consistent with Jones v Garnett. To that extent taxpayers will need to be guided by their advisers. If providing details using the ‘white space’ in a return is considered appropriate it would be helpful if the entry could be made at box 7.32 on the "Trusts etc" pages of the individual SA return. Taxpayers who have already filed their tax returns on-line, but think they may be affected by the decision cannot use the on-line facility to amend their SA return. However, if a taxpayer has filed his or her return on-line and, in light of the judgement, wishes to make an amendment, he or she can write to us telling us how the return is to be amended. There is no need to re-submit a full paper return. Taxpayers have until 31st January 2007 to amend their 2004/05 return. Open enquiries Where there are open enquiries into similar cases our intention is to keep them open pending finality. We did not seek closure in our favour following the High Court judgement and it would be premature for that to happen now. A taxpayer who considers he or she is affected by this judgement may, of course, apply to the Commissioners for a direction requiring HMRC to issue a closure notice. In those circumstances it is our intention to oppose the application on the grounds that the appeal to the House of Lords constitutes reasonable grounds for not issuing a closure notice. -- More information Shout99 has a free information resource on Section 660 news. Freelancers Outside IR35 (FO35) offers protection against Revenue investigations into Section 660, IR35 and other tax and VAT issues. It is available online for immediate cover for £104.50 a year. -- If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'. - Susie Hughes © Shout99.com 2006

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