Key performance indicators, costings and brings humour (which is sadly lacking) to the issues you mention.

1) Time spent business planning, which is an hours measurement;
2) Dealing with correspondence (count the emails - it’s an easy test);
3) Time on the accounts - not hard to prove - sign the vouchers as they’re processed and keep copies of signed cheques as evidence of involvement and the case is proven, I suggest;
4) Log the business phone calls received - doesn’t that make sense anyway, and won’t a simple book by the phone do for the job?
5) Estimate the work contribution to productive output if there is one - but be realistic as to what it is and what it’s worth. My wife, for example, reads some of my stuff before it is published to offer a second opinion, style comment and so on even though she has no tax knowledge. That has a value. Is it beyond anyone’s wit to attribute reasonable value to that, and to keep a record? No one will be seeking precision to the last 10p, after all.

I entirely agree on the language issue.

I’m not sure I see the probelm with relationships and determining income. I should add in saying so that I was in partnership as a chartered accountant with my first wife and co-own businesses with my current wife. I have some experience in this area.

My point is relatively simple: when there is a real partnership and people are really working together I am going to be very surprised indeed if the Revenue could raise any realistic challenge to any sensible split in the income arising IF there are appropriate indicators in place that each really contributed value. In your case there clearly are. And I do not think preparation of those indicators would be difficult. Time sheets would be one the weakest, by the way. They can be fabricated and mere hours are no indication of value. Anyone who intends to rely on them would be poorly advised.

The purpose of this legislation is to attack arrangements where there is no real partnership and no record if involvement.

If youir concern is it will not be used that way - I share that concern. But this requires another issue to be tackled - which is that of purposove legisalation. See our Code of Conduct on that. http://www.taxresearch.org.uk/Blog/2007/10/18/the-tax-justice-network-code-of-conduct-for-taxation/ I am convinced of the need for this - and that it would solve this problem by giving clear direction to Inspectors of what they are meant to do with the legislation they are given.

But that is constructive criticism of the legislation. My disappointment with the comments on AccountingWEB was their inability to take the debate forward. I hope we can agree that there is a difference.

Richard

But - and I’m going to put my cynical hat on here - how many accountants will argue for tax simplification? Simple tax = less work for accountants.

That said, tax is now getting so complicated that perhaps I’ll be proved wrong. I hope so.

M

I act for small business, and I can see where many on AWeb are coming from, and many are arguing from a passionate standpoint, but rather than argue ‘oh my client will pay more tax’ my worry is the legislation is not clear, adequate nor do I feel it is fit for the purpose.

What we need in the UK is robust and clear tax legislation, something we will not get under this government.

The British businessman/woman deserves better than they are getting, we are seeing time and again legislation that is rushed out and its effect is one of harming UK enterprise, and on top of this, there is the not knowing what they will do next.

I only hope we see a change of government soon before it is too late for the entrepreneurial talent the UK has, and with a change of government I hope we will one day see clear and robust tax legislation, legislation that allows advisers to advise with certainty and entrepreneurs to be entrepreneurial.

Sorry - I think you have hit the wrong target with your comment.

I have suggested here that if people want to claim their wives sit at home waiting for the business line to ring that they should prove it with a record.

In practice I know - and I suspect you know - that this does not really happen in 99% of cases where it is claimed. Of course cals go to mobile phones.

But the reason why people won’t keep a log is that they don’t want to prove that no real value is added.

So I am real - very real. I have been a practitioner for a long time remember.

Richard

“4) Log the business phone calls received - doesn’t that make sense anyway, and won’t a simple book by the phone do for the job?”

Which phone is that? The home phone that no one answers, or the mobile one in someone’s pocket. Together with the log book…

Get real Richard…

I 100% agree - the income shifting paper is far too narrow in its approach and should be much more broadly and ethically based

But for accountants to argue that self interest or claimed (but not actual) difficulty in justifying a salary is reason for rejecting the proposal is as absurd.

That was my point.

In essence - we accountants have to be on a higher plain. And the debate has been uneifying on AccountingWEB if this is the criteria for its likely contribution is used.

Richard

Those who see only higher tax bills as a result of these proposals ask why they are being targetted when private equity partners and non-doms are given special deals to keep their taxes down. I’m not sure that a correct intellectual position on income shifting is enough to convince these people when such guiding principle is so notably absent elsewhere in the tax system. And, in a democracy, small business, a large constituency, does need to be convinced.

I can’t avoid the conclusion that our lords and masters are so blinded and cowed by wealth - as well as oblivious to the obvious consequences of ill-considered legislation, eg the Corporation Tax 0% band - that they are prepared only to select the easiest targets, even if they are intellectually justifiable. If they were guided by clearly stated principles that they had the balls to observe, it would be far easier, politically and practically, to gain some sort of acceptance for specific proposals.