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Geoff and Diana Jones from IT consultancy, Arctic Systems, have taken their case from the Commissions (defeat); to the High Court (defeat) and then to the Court of Appeal (victory). HMRC appealed that decision to the highest court in the land, the House of Lords.
In specific terms, the Lords will decide if Mr and Mrs Jones owe the tax man about £6,000 under Section 660 rules, which, HMRC argues, means that the dividends paid to Mrs Jones should be treated, for tax purposes, as income belonging to her husband, the main fee-earner - and a higher rate tax payer.
In wider terms, the case has been closely watched by tens of thousands of husbands and wives who own small businesses and fear a decision in favour of HMRC could result in backdated tax bills of up to £42,000 arriving on their door mats.
There has been much dispute about whether or not this is a 'test case' in terms of its wider implications. HMRC refused to agree to it being a test case in the public interest, which would have meant the case was funded from the public purse. However, it is unlikely that the lower courts would discount a ruling by the Lords under any circumstances.
The Lords will give their decision at 9.45am on Wednesday (July 25) in the main chamber of the House of Lords.
Further information
Shout99 has written two articles summarising the situation to date:
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