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| CIOT welcomes income shifting EDM |
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The Chartered Institute of Taxation (CIOT) has welcomed an Early Day Motion (EDM) on income shifting that has been tabled in the House of Commons. The text of the EDM reads as follows: “That this House notes with concern the proposals for a new tax on income shifting; is aware of the disquiet expressed at the proposals by small businesses, the self-employed, freelancers, accountants and other affected parties; is concerned that the new tax will make it impossible for jointly-owned businesses to self-assess their tax liability with any certainty; observes that ever since the introduction of the independent taxation of spouses, it has been standard practice for married couples to own businesses jointly, that this was recommended by the Government for many years and that people who followed this advice now face being penalised; is concerned that the proposals are in direct conflict with the Government's stated aim of encouraging enterprise and small businesses; observes that the new proposals will be inconsistent with divorce law and capital gains tax, so that spouses will be entitled to an equal share of the value of a business when they divorce, or of the proceeds from it when sold, but not of the profits while it is operational; and urges the Government to reconsider its proposals ahead of the Budget.” The CIOT has long been of the view that fundamental reform to the structure of small business taxation is necessary if small businesses are to be able to plan their tax affairs with any degree of certainty. The Institute accepts that what it prefers to regard as “income sharing” within members of the family unit is an issue which would need to be considered as part of that reform, but regards it as completely wrong for the Government to deal with this one issue in isolation and from the narrow and exclusive viewpoint of anti-avoidance. Andrew Hubbard, CIOT Vice-President, says: “The fact that the EDM has cross-party support reflects the growing concern about the issue. While we are now at a late stage in the process, the CIOT still urges that there be a re-think on the issue.“ Link Income Shifting Early Day Motion Chartered Institute of Taxation
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About The Author  Sarah Laing Sarah is a Chartered Tax Adviser. She has been writing professionally since joining CCH Editions in 1998 as a Senior Technical Editor, contributing to a range of highly regarded publications including the British Tax Reporter, Taxes - The Weekly Tax News, the Red & Green legislation volumes, Hardman's, International Tax Agreements and many others. She became Publishing Manager for the tax and accounting portfolio in 2001 and later went on to help run CCH Seminars (including ABG Courses and Conferences). Sarah originally worked for the Inland Revenue in Newbury and Swindon Tax Offices, before moving out into practice in 1991. She has worked for both small and Big 5 firms. She now works as a freelance author providing technical writing services for the tax and accountancy profession. |
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Article Added Wednesday, 30 January 2008 | 639 Hits |
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