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Welcome to Alchemy Financial Solutions
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Are you...
- Struggling with your tax return?
- Looking for a pro-active accountant who'll help you make more profit and pay less tax?
- Starting out in business?
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Whatever your needs, we can help. Alchemy Financial Solutions is a firm of Accountants based in Ashford, Middlesex offering accounts, taxation and business advisory and support services to a wide range of businesses and individuals. At Alchemy Financial Solutions we provide a cost-effective, high value solution to meet all of your financial needs. We work hard to get to know you in order to deliver timely, individual advice on how to improve your business and personal wealth. To find out more about how we can help you and your business click here for an overview of our services. To find out more about us click here. To access a wealth of information visit our resource centre or download our free factsheets.
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Husband and Wife Companies ... what's all the fuss about?
You may have read in the papers that the Revenue are attacking husband and wife companies and trying to collect more tax.
To try and explain, in April 2003 the Revenue changed their view on the taxation of dividends taken by husband and wives from companies that they owned together (although the Revenue deny that it was a change of view!). Prior to that date, it was common practice to set up a company in which both spouses owned shares and received dividends, even though only one of the spouses actually did most of the day-to-day work.
This was to take advantage of the tax rules, which tax each spouse on their own income in their own right; so most married couples could make use of their own personal allowance and lower tax rates.
HOWEVER, the Revenue now believe that they can tax the spouse who does most of the work in the business on all of the dividends, even though they didn't receive all of those dividends! The Revenue also believe that this principle could apply to husband and wife partnerships as well.
Latest News:
Jones v Garnett - a few questions answered
The Court of Appeal has delivered a unanimous decision in favour of the taxpayers in the latest round of the so-called 'Arctic Systems' case. Their decision overturns the split decision of the Special Commissioners (won by the Revenue on a casting vote) and the decision of Mr Justice Park in the High Court.
So is this the end?
The Revenue will no doubt wish to consider an appeal to the House of Lords and that will bring further delay to achieving finality in this matter. An alternative might be to consider new legislation although this would only be relevant for the future.
What about the 2004/5 and previous tax returns?
You are clearly at liberty to ignore all that has gone before and file your tax return accordingly; that is, reflecting a split of the income between both spouses. However, you may wish to speak to us in detail about this point.
Does this decision apply to other cases?
The decision only applies to Arctic Systems-type cases at the moment. However, it is unlikely that the Revenue will pursue other company or partnership cases for the time being, until the Arctic case has reached a final conclusion. |
