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Section 660 was not in common usage by HMRC - and those cases that were pending tended to have stalled to await the outcome of Arctic Systems in the House of Lords.
Tens of thousands of married couples breathed a sigh of relief last week when the decision went in favour of Arctic Systems - even though the Government rapidly announced its intention to legislate.
Few were more relieved though than businesses who were already under Section 660 investigations.
Three years ago, Shout99 was contacted by the director of one such company. (See: Section 660: One business's story - Shout99, June 2004.) Their company, which we called 'Our Business Ltd' was undergoing a Section 660 investigation, but differed from the usual 'Personal Service Company' in so much as there were three directors and their wives involved in the business; they had over 4,000 live or completed customer agreements built up over13 years; and had had a substantial offer for their business giving their wives' shares a value of nearly £60,000.
Powers
This week the same director contacted Shout99 again following the Arctic decision. He said: "Firstly, and obviously we are all unbelievably relieved at the outcome in the House of Lords, We have lived with this for four years now, it has been a huge worry overshadowing our lives with an either constant conscious or unconscious mental strain ... and although we have naturally not heard about our case yet, the result is viewed positively although guardedly until we have our own confirmation of an end to this matter ....
"I would however like to make a couple of points in the light of your editorial ... I would entirely endorse the views expressed by Geoff and Diana in that it is the way this has been handled by the government that is so appalling and hurtful. That the government should have hounded individuals as "criminals" in this way is extremely worrying. It does not take much imagination to envisage the outcome of these "investigations" had the recent proposals to allow the Revenue access to property and bank accounts already been enabled!
"The outcome only serves to highlight so critically that the the powers of institutions such as the Revenue must be accountable to the courts. Giving them powers to become "judge, jury and executioner" is unthinkable in a supposedly "free society" ....
Legislation
" Specifically in relation to S660 .... legislation to change the law was clearly the correct and ethical approach to have adopted out the outset. The law is a constantly changing phenomenon and is subject to constant subjective changes in interpretation. This is an accepted fact of life.
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"Legislation was not used in this instance as the government saw an opportunity to hound and pressurize a relatively weak sector of the business community (the small businessman) who it was envisaged would easily "collapse" when pressed and who would generally have neither the time, means or mental strength to defend against such aggressive tactics from the Revenue ..... we all thank God for Geoff and Diana and the good offices of Malcolm Gammie QC!
"So just to conclude, I hope I speak for many fellow victims when I say that we are not the slightest bit bothered about legislative change .. we have always followed the professional advice and guidance of our accountants and if the law changes then so will our policy and practice ... no legitimate businessman is afraid of legal change ... but what we are afraid of is heavy handed, ruthless retrospective attempts to enforce outdated, unused legislation because it suits the "whim" of government."
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Susie Hughes © Shout99 2007
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