Don't Put Your Husband On The Board, Mrs Worthington
Jeremy Hetherington-Gore Unleashed
28 July, 2007
Nothing new there, then!
The Arctic systems case last week saw final victory for a couple forced to pay more tax on the profits of their joint business through HMRC's interpretation of some convoluted income tax legislation.
But after the House of Lords ruled in the couple's favour, it took the Treasury just 24 hours to say that it would seek a change in the law to prevent husbands and wives from running businesses in such a tax-efficient way.
In other words, I can run a business with my mistress, the local publican or Ed Balls, and we can pay ourselves much of the profit as lower-taxed dividends, even if they don't participate at all; but if my wife puts her dowry into my business and keeps the books, operates a canteen for the workers (me) and provides health-care, the government says she shouldn't be entitled to dividends.
Interesting. What does that signify? Little women (or little men for that matter) should stick to doing the housework? Marriage is only for wage-slaves?
No, it's nothing so crude, just a normal piece of tax-collectors' amoral pragmatism. It will be interesting to see whether it gives rise to any debate in our supine House of Commons on such issues as freedom, personal choice or the morality of taxation.
Don't hold your breath! You probably won't even read about it until it appears as a footnote in the 2008 Finance Bill.
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