The issue at stake is the common practice of couples paying the bulk of their income as dividends, which they split equally between them. This is fine unless one of the partners actually does more work in the business than the other. In these circumstances the Revenue is claiming that this tactic is merely a device for the real worker to channel some of his/her income to the partner to avoid paying tax.

The owners would claim that both parties shared the risk in setting up the business and the dividend is remuneration for taking that risk but the Revenue see it quite differently. Literally thousands of small businesses could find themselves with an uncomfortable tax bill going back years if the Inland Revenue are successful.