Independent taxation of husbands and wives has now been with us for 20 years. Introduced in the 1988 Budget by the then chancellor, Nigel Lawson, he was quoted in Hansard as saying that husbands and wives would be able to arrange their tax affairs between themselves in a way that is most beneficial to them.
In the years since the introduction of independent taxation, it has become apparent that HMRC does not subscribe to Mr Lawson’s original view, and perceives that widespread abuse is taking place by small and medium-sized, husband and wife-owned businesses. Indeed there have been a number of important tax cases along the way, including Arctic Systems.