Still – everyone is used to it by now so I guess we all just live with it.

The real problem is the new forms 42 – return of share movements, unapproved options and other defined (though I defy you to find it in 15 minutes) “events”!

I know the big city traders were effectively being paid bonuses in shares or as dividends and saving millions in tax but most of my clients weren’t. Of course, they were doing some tax planning but not in that way or on that scale. The Revenue probably did need to do something but is the current system really the answer?

Does creating endless problems and complexity on (generally perfectly innocently intended) transactions in SMEs actually yield a good result if the Revenue had to operate on a cost vs benefit basis? In any case what are they actually doing with the returns that are so carefully submitted – I have yet to receive one query on them – ever! That does sort of imply that someone is collecting them – or even filing them – for future reference rather than current use.

Is it really worth it? Who can persuade the government that more regulation is not the answer – perhaps if you could spend less time filling in forms and worrying about share transfers and more time looking at your business you could do more and pay more tax on profits – surely that would make more sense.

Will anyone listen – frankly I doubt it.

In the Government’s view minimising a tax liability “results in an unfair outcome” that puts other businesses “at a competitive disadvantage”. Surely competition is a vital part of a free market. Anyway, what happened on Lord Tomlin’s statement in IRC v Duke of Westminster in 1936 (yes even in 1936 people were planning to reduce tax):

“Every man is entitled if he can to order his affairs so as that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to result this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax.”

Presumably nowadays that should finish “until the Government change the law so he has to!”.

The Government are therefore planning to bring forward proposals for changes to the law to ensure that individuals such as Mr Jones should pay tax on what is, in substance, their own income. In the meantime, (I assume, grudgingly!) “HMRC will apply the law as elucidated by the House of Lords and will be providing guidance in due course.”

A final throwaway statement – “The Government would not want commercial arrangements to be caught by any change in legislation. Consultation should help to ensure this.”

Watch this space!