By Sarah Toyne BBC News Online personal finance reporter

I feel like we've been singled out Geoff Jones

The Inland Revenue is targeting businesses run by married couples, and stinging them with re-calculated tax bills dating back years, it has emerged.

Accountants say the Revenue has resurrected anti-avoidance tax legislation dating from the 1930s to target the payment of dividends to spouses.

Geoff and Diana Jones from Pulborough in West Sussex have received a demand for �42,000 from the Revenue.

"It was a total shock. My wife and I have always done everything straight down the line," Mr Jones, a computer contractor, told BBC News Online.

"We set up our business in the same way that everyone does around the country - I feel like we've been singled out."

Cases like the Jones', although relatively few, are very worrying for thousands of couples who run small businesses around the country.

Accountants are accusing the Revenue of slipping the change through the "backdoor".

"The individuals who are getting these unexpected tax bills should be being treated fairly by the Revenue and getting proper guidance, which should be well-publicised," says Anne Redston of Ernst & Young.

Stalemate

It has been a common practice for husbands and wives who have equal shareholdings to split the dividend payment along the same lines.

The Inland Revenue has not changed its policy or practice on this Inland Revenue statement

But the Revenue is now taking issue with the actual contribution both spouses put into the limited partnership.

It is now saying that if the dividend payment exceeds what it views as the person's contribution to the company, then it will ask for the money back.

"If you haven't done enough work to justify the shareholding split, then they could challenge you and reallocate the dividends to the main shareholder, typically the husband," says Anne Redston.

"He would then have a bigger tax bill. It is however far from clear that the legislation allows them to do this in all the cases they are now taking up."

No change of policy

The Inland Revenue denies that it has changed its policy or practice.

"This is anti-avoidance legislation, which has been in place since 1936. It prevents avoidance of tax, for example, a taxpayer with a higher rate of tax transferring income to someone who is liable at a lower rate, " the Revenue said in a statement.

It is very traumatic for people who find themselves in this position. Steve Greenwell, Qdos

"The legislation (in relevant cases) treats the income as belonging to the person who transferred the income, rather than the recipient.

"The Inland Revenue has not changed its policy or practice on this"

Others disagree.

Steve Greenwell of tax consultancy Qdos in the Midlands is dealing with three cases, including the Jones'.

He said: "It is very traumatic for people who find themselves in this position. The recalculation of tax liabilities can be quite substantial - and run into tens of thousands of pounds."

Nobody was aware of (these changes) - not even the professionals Geoff Jones

Matt Boddington of Accountax agrees.

"It is certainly more prevalent than it was five years ago - even though the legislation has been around for a long time."

Accountants are particularly worried about how far it could be applied retrospectively.

There is a six-year window for company tax investigations, but the Revenue can apply to the Tax Commissioners to open up files going back 20 years.

Geoff Jones is now considering taking his case to the Tax Commissioners and, if necessary, through the courts.

"For a long time I was the only case, but there have been more.

"Normally I like my privacy, but now I've got to the stage where I want to talk about it openly - and am willing to take it the whole way."