Michael Lewis Partners Limited banner

Settlements

The question is, what is a settlement? It seems the Special Commissioners can't agree so how are the rest of us supposed to know.

The situation where the question is most likely to arise is a small family owned business, principally where one person does most of the work but other family members receive dividends earned from that work.

What the Revenue will argue is that the settlement arises because one person is doing all the work but uses the Limited company to divert part of their income to another person so as to make use of that persons personal allowance and basic rate tax band and so avoid higher rate tax on part of the income from their own efforts.

In Arctic Systems the two Special Commissioners disagreed and the more senior one used his casting vote to side with the Revenue. The Court of Appeal changed the decision in favour of the taxpayer

The problem for the rest of us is not knowing if this is a decision or not. How can it be clear to us what is and is not a settlement if two Special Commissioners can't agree.

The decision is going to the House of Lords.

In brief...

Annuities

I have had the feeling they are poor value for a long time. On average the insurance company gets to trouser 40% of the pension fund of a man who buys an annuity at age 65. How can it be that so much of the fund remains for the insurance company? In full... »

Accountancy

Whatever the size of your business we can prepare unaudited statutory accounts in the format required by the Registrar of Companies together with tax computations for the Inland Revenue. In full... »