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MPs start 'income shifting' petition
by Susie Hughes at 10:30 18/01/08 (Section 660)
A LibDem MP has started a Parliamentary petition for MPs, expressing concern at the new 'income shifting proposals.
Freelancers are being urged to write to their MPs to encourage them to support the Early Day Motion (EDM 714).

John Brazier from the Professional Contractors Group (PCG), said: “Now that MPs are beginning to see the dangers of this proposed new tax, the time is right for all freelancers to write to their MP and urge them to sign the motion, if they have not already done so.

“We are grateful to Sir Robert Smith MP for drawing the issue to the House’s attention. If it is properly supported by MPs, this motion will send a clear signal to the Government that it must re-think its proposals before they inflict disaster on family businesses throughout the UK.

"Family businesses are often owned jointly by family members, who then share any profits equally among themselves - it can often be tax-efficient to do so. This is a standard way of doing things, but the Government has now arbitrarily decided that it constitutes "income shifting" and wants to put a stop to it."

The EDM, which so far has received eight signatures reads:

    "That this House notes with concern the proposals for a new tax on income shifting; is aware of the disquiet expressed at the proposals by small businesses, the self-employed, freelancers, accountants and other affected parties; is concerned that the new tax will make it impossible for jointly-owned businesses to self-assess their tax liability with any certainty; observes that ever since the introduction of the independent taxation of spouses, it has been standard practice for married couples to own businesses jointly, that this was recommended by the Government for many years and that people who followed this advice now face being penalised; is concerned that the proposals are in direct conflict with the Government's stated aim of encouraging enterprise and small businesses; observes that the new proposals will be inconsistent with divorce law and capital gains tax, so that spouses will be entitled to an equal share of the value of a business when they divorce, or of the proceeds from it when sold, but not of the profits while it is operational; and urges the Government to reconsider its proposals ahead of the Budget.

MPs can be contacted at the House of Commons, Westminster, London SW1A OAA or via the website, WriteToThem.

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.

Shout99 members are invited to submit their practical experiences as part of a response to the Government's consultation process (See: Practical examples needed of income shifting difficulties - Shout99, Dec 2007).

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Susie Hughes © Shout99 2008

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