Churchill Knight & Boox clients being investigated as Managed Service Companies

[Fred Bloggs]

The only salary is you are allowed to pay yourself as minimum PAYE wage threshold for example, but the contractor decides that at the start of the year - you tell CK not the other way round. You can change your tax planning to whatever suits you. For example i now have a PAYE perm role and do some freelance in addition, so i set up as no salary. Every year the contractor decides this - not CK.

Utter rubbish.

[frz78]

Utter rubbish.

sorry what are you on about?

[jamesbrown]

I have to say, I find it hard to believe that from the people paying for the "completely hands-off approach" that's available right now on the CK website. There's two services presently available, Professional and Elite. I really cannot see folks paying for Elite and getting the same service as Professional or vice versa.

Of course, what CK offered back in the day I don't know. I would first be running a screen on who paid what and look at the most expensive service customers first. They're the ones likely most at risk from possible MSC legislation. I think?

I don't see everyone getting the same treatment from Hector once it becomes clearer who received what service. If I were a vanilla book keeping CK customer, and I could prove it, I'd be a bit more relaxed than if I were a "completely hands-off approach" client.

Yeah, agree. If that marketing corresponds to reality and it must, at some level, because there are two tiers of pricing like you say, then those paying for anything "completely hands off" will probably be the main target.

[frz78]

Utter rubbish.

Pease explain this rather than being dismissive and arsey, its not cool.

[Fred Bloggs]

sorry what are you on about?

I haven't paid salary in years. There's zero requirement for a director to draw a salary, never mind minimum wage as PAYE.

I am going to be very "arsey" responding to completely clueless posts about minimum wage. I doubt I am on my own in that.

[frz78]

I haven't paid salary in years. There's zero requirement for a director to draw a salary, never mind minimum wage as PAYE.

I am going to be very "arsey" responding to completely clueless posts about minimum wage. I doubt I am on my own in that.

I never said there was a requirement - i said it was 'for example' a way that people decide to setup. You read it and jumped to a conclusion. it was merely illustrating that there are no 'locked in' salaries or dividends form my perspective. =

[eek]

Or indeed FA or any other bookkeeping software backed by vanilla accountancy, but that is completely implausible and far removed from the MSC legislation. Indeed, it's quite clear that vanilla accounting is out of scope of the legislation. If there is a problem related to the bookkeeping software, it will be much more contrived than simply its existence, rather that it defaults to certain salary and dividend payments that each contractor then follows by default. But it sounds like that wasn't happening or, at least, it wasn't happening in recent years, perhaps 10 years ago.

Given the year 2017/18 (so after the April 2017 public sector changes came in) my suspicion is that the argument HMRC will use is that the portal for an umbrella worker and a limited company contractor was virtually identical.

Combine that with the marketing and I can see how an argument could be formed - especially given the marketing and anything similar to the email highlighted above.

It's worth saying that there is currently a significant (and seemingly very rapid) move in the market to separate (best in breed) products for accountancy / umbrella work. With Freeagent being the obvious go to choice for accountancy and seemingly My Digital for umbrella work.

[DealorNoDeal]

I suspect HMRC regard all contractors as not proper businesses. Probably in their eyes, anyone operating outside IR35 is taking the piss.

They just don't like pursuing contractors individually. It's far too resource intensive. (Ironically, the avoidance schemes suited them better.)

So, I can see why they would latch on to anything which has the potential to snare a whole bunch of people in one fell swoop.

[NotAllThere]

I suspect HMRC regard all contractors as not proper businesses.

You only suspect? It's been that way since IR35 was introduce in 2000.

[Fred Bloggs]

You only suspect? It's been that way since IR35 was introduce in 2000.

That's one of the reasons, judging by some of the comments made here, it's possible some contractors haven't particularly helped themselves. It seems to me that some of those who perhaps arrived on the contracting scene within the last ten years or so haven't understood the potential consequences of things like MSC legislation or how to avoid falling into it. Of course, ignorance of company director's responsibilities and company law is no defence when Hector comes calling.

Those who had a truly vanilla book keeping service from any accountant and can prove it doesn't have much to fear would be my belief. Anyway, we'll know more soon about HMRC tactics.