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Industry urges S660 guidance

James Bennett, Accountancy Age 07 Oct 2004

Senior figures from the accounting profession will today (Thursday) meet with Inland Revenue deputy chairman David Hartnett to try and clarify the government's interpretation of controversial tax law, Section 660.

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Revenue sources have said the meeting is likely to focus heavily on how the government will educate businesses to ensure they don't fall foul of the law.

It comes in the wake of the shock decision in a test case between the Revenue and Artic Systems.

Hussband and wife Geoff and Diana Jones of Artic Systems lost their case in front of Revenue special commissioners last week, leading outraged accountants to demand clarification on the 70-year-old tax law.

Hundreds of thousands of businesses could now be caught by S660. Accountants such as Anne Redston, tax partner at Ernst & Young, and Mark Lee, chairman of the tax faculty at the ICAEW, are hoping to convince the Revenue to issue detailed guidance.

Redston, who tracked the case as an adviser for the Professional Contractors Group, said the decision made a 'mockery of accountants' in the advice they have given on S660.

But she said she hoped for a fair hearing and 'some movement' in an ongoing and 'disappointingly slow' case.

'We sent the Revenue a list of questions last December and asked whether the examples we'd given were IR35 or S660A-caught or not, but they haven't answered in 10 months,' she said.

'The problem is that even the Revenue is in the dark over guidance.'

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