Elizabeth Colman
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They are the unassuming husband and wife team who humbled the taxman in an epic court battle. But Geoff and Diana Jones’s four-year struggle, which culimated yesterday in a victory at the House of Lords, was over less than £10,000 in unpaid taxes.
While HM Revenue & Customs had initially served the couple with a £42,000 back-tax bill spanning six years, an early court case decided that HMRC could not pursue tax for the full period. The disputed amount became just £6,000 plus interest.
Mr Jones, 50, admits it would have been easier to give in at that point. Nonetheless, the couple fought on, to the Court of Appeal and then the nation’s highest court, for the principle of the matter. Even yesterday, after the Treasury announced late in the day that it would change the law to prohibit income-splitting arrangements, Mr Jones considered the House of Lords decision to be a victory.
The Joneses, who live in Pulborough, West Sussex, with their two daughters, created their IT consultancy Arctic Systems in 1992.
He took on IT contracts and Mrs Jones, 53, worked about five hours a week for the firm on bookkeeping, banking, filing income tax and VAT and carrying out correspondence on the company’s behalf. They chose to continue the income-splitting arrangement that HMRC took issue with, thinking it would be hypocritical to back down.
Mr Jones says he thought the Revenue was wrong and refused to change the way they ran the business, paying profits as dividends split equally between them.
At the House of Lords yesterday, Mr and Mrs Jones said they were “delighted” and “overjoyed”, but also angry that they had been targeted.
They say that the experience has left them “completely disillusioned” with the Revenue – an understatement, perhaps – but are eager to participate in the consultation process with the Government before it unveils legislation that will, effectively, undo much of the Joneses’ hard work.
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