HMRC against equality between man and women?

We all hear every day that a woman’s work - especially at home - is not compensated for or appreciated. The Government and courts have on numerous occasions told us that something needs to be done about this unfair treatment of women.

While I do not know the exact details of the Arctic Systems case in as much as Mrs. Jones was working at home or full time in the office, it appears to me, that here is a mechanism that compensates women for their efforts at home.

Indeed it appears that the government of the time was fully aware of the consequences of it’s tax legislation, when Minister Norman Lamont said:

“Independent taxation is bound to mean that some couples will transfer assets between them with the result that their total tax bill be reduced. This is an inevitable and acceptable consequence of taxing husbands and wives separately….we have made it clear that we expect income splitting will occur.” - thanks to Mark Lee for this.

Surely the HMRC knew about this, it’s assertion that it puts other business at an disadvantage or is unfair to other tax payers is the usual smokescreen, when they have wasted lots of tax-payers money on a court case that should never have been.

The Government needs to realise how important small business is for the economy and learn to appreciate that running a business has an affect on the whole family of the small business owners. IMO the arrangements between Mr. & Mrs. Jones have been entirely fair and proper, no matter if Mrs. Jones or any other partner worked in the business or not, they certainly contributed to the success of the business by supporting her husband. I guess that may be somewhat difficult for an civil servant to understand.

But as usual HMRC has made a big mistake and small business and families will be made to pay.

4 Responses to “HMRC against equality between man and women?”

1. Mark Lee
   http://www.BookMarkLee.co.uk
   
   Said on July 29th, 2007 at 8:48 pm

   I entirely understand the frustrations of many small business owners with regard to the way that HMRC has unfairly been attacking the extraction of profits by way of dividends. This was at the crux of the Arctic Systems case.

   Equally there is no endemic discrimination between men and women here as exactly the same rules apply regardless of which spouse is the main earner.

   The Government has announced that they will consult about how to rectify the position. By which they mean the temptation for a worker to set up a company and split the shareholding of the company with their spouse/partner. The Government’s concern is that by doing this the worker ends up paying less tax and NICs than they would have paid if they were on PAYE. In such cases there is no facility to split one’s income with a spouse/partner for tax purposes.

   In the meantime, if a small business owner wants to pay a spouse/partner for their contribution to the business they can do so and, in so doing, move part of the business profits from the main earner to the spouse/partner. This has always been perfectly acceptable. The problem (so far as the Government is concerned) is when the spouse/partner does not work in the business. In such cases, so the argument goes, the main earner’s tax bill should not be reduced just because he/she has a family to support and allows part of the business profits to be paid directly to his/her spouse/partner.

2. Stefan Töpfer
   http://www.winweb.com
   
   Said on July 30th, 2007 at 9:21 am

   Hi Mark,

   Thank you for your comment, but I’m not sure I made my point well enough in my post.

   I still call it discrimination - and in your last paragraph you make the point - even if a partner is not “working” in the business ( I’m not even sure if that is ever the case in small business, like home-, micro-, lifestyle-, mobile-, SME-, SMB-, SOHO-businesses), but only “supports” it, by having to live with long hours of work and absent partner from home and family life, etc.

   If you work nine to five or have a bigger business where you get a more regular lifestyle, I may be inclined to understand HMRC arguments - but that is radically different from running a small business.

   As far as the share ownership is concerned the whole argument is nonsensical anyway unless you restrict the right to own shares.

   ST

3. Terry
   
   Said on November 10th, 2007 at 5:59 pm

   My wife runs a small cleaning business from home and I am emplyed full time. Can her business pay me for book keeping etc…. and if so what is the threshold before i have to delcare this income?

   Thanks
   Terry

4. Stefan Töpfer
   http://www.winweb.com
   
   Said on November 10th, 2007 at 6:15 pm

   Hi Terry,

   I can’t see why your wife can’t employ you to do her bookkeeping, and her business can pay you of cause.

   I would advise you to get an accountant to give you advice, especially on your second part of your question. I’m not qualified to do that and I do not know your personal circumstances.

   Stefan

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