Churchill Knight & Boox clients being investigated as Managed Service Companies

[SP8977]

However I am still massively worried about the fees clause the one we are all caught on, the rest we can all argue. The fee we can't.

Not sure why you are so massively worried about this? Personally, it is the least worrying aspect of all. HMRC's arguments around it are ridiculous. Lots of accountants charge monthly. There is nothing abnormal about it. The CBS case was completely different: the point was that they only charged when the contractor was invoicing. The only mildly worrying this is that CK reduced the fee to some clients who were not working. Assume that impacts only a minority and again there are numerous commercial reasons that can be argued here.

[Hareforthebear]

I think they are too. The tone I got from Hector 2 years ago was that it was just a standard investigation to ensure Boox wasn't an MSCP and that Boox was fully on board and assisting with the case. Boox were confident the investigation would just run its course and the objections to strike off would be removed once Hector was satisfied they're not an MSCP. The only slither of gratitude I have is that the case barely progressed between 2019 and March this year else they would have issued determinations for those tax years too.

Yeah I am in a similar boat with the strike-off. Initially I thought boox was being a bit evasive and ambiguous about it, but knowing what I know now I am under the impression they have been following up with them the last couple of years about it and getting nothing of substance back until they got notified the determinations were coming.

I think its the case that there has been f-all info given to them by HMRC, and they were of the belief that it was a run of the mill enquiry / misunderstanding that they were in the process of closing out with them given as far as they are concerned they are accountants and are not an MSCP. I think the reason they have not kept everyone updated is cos there was nothing happening and very little to update about.

I genuinely think this is the case rather than them intentionally deceiving their clients / ex-clients. Still, given they have stated about how vigorously they would be arguing this with HMRC, would love to know what’s currently happening their side, if anything at all.

[SP8977]

It's been said here before, but not sure that the large groups (IPSE, ICAEW, ACCA, etc) are doing anything to push it. There has to be political pressure. Why do you think global companies get away with offshoring so much of their activity whilst actually generating profits here? Do you not think the big 4 provide "corporate solutions" to big companies and formulaic advice to them to setup certain activities offshore for instance? We live in a country where we have a person living in number 11 downing street who says they don't have a long term plan to live here and therefore were taking advantage of tax rules for non domiciles.

HMRC think we are an easy target, a bunch of individuals who will just pay up. Making small businesses, which is what we are pay employee & employer taxes is just ridiculous. The msc rules are silly and at the very least clients of regulated accountants should have an automatic exemption. The rules were not created to catch legitimate contractors. We are savvy and know what a company is and we have decided to trade in this way. We have chosen to go to a specialist accountant. The fact that we chose to go to a regulated chartered accountant and end up in this situation is scandalous. This was a law dreamt up by Labour and if we ever had a chance of getting the law changed, it is with this government. It is a serious restriction on trade and on human rights stopping us from choosing a regulated accountant of our own free will. Funnily (and sadly) enough, the way to get the attention of a tory mp is to probably link it to brexit somehow.

It always seems to be the little person who is targeted unfairly. For decades companies were setup by rich people with access to expensive advisors. Small businesses were expected to be sole traders and HMRC cannot stand that small business owners have the audacity to do what their big business friends have been doing for a long time.

[eek]

Yes there is that and the massive rushed nature of the years they did get out suggest HMRC kind of went... 'sod it let's go for it'. However I am still massively worried about the fees clause the one we are all caught on, the rest we can all argue. The fee we can't.

My hope is (again the hope...) the department dealing with this is so overwhelmed (they HMRC have suggested this) they miss next March's batch of letters for 18/19 etc., As we said though the hope (and waiting) is the killer here.

I don’t think the reason was “sod it, let’s go for it” it’s more - “get something out it needs to be done before April 5th”.

which is why the response from hmrc is so poor it’s not been blocked out as work that needs to be done

[GregRickshaw]

Yeah I am in a similar boat with the strike-off. Initially I thought boox was being a bit evasive and ambiguous about it, but knowing what I know now I am under the impression they have been following up with them the last couple of years about it and getting nothing of substance back until they got notified the determinations were coming.

I think its the case that there has been f-all info given to them by HMRC, and they were of the belief that it was a run of the mill enquiry / misunderstanding that they were in the process of closing out with them given as far as they are concerned they are accountants and are not an MSCP. I think the reason they have not kept everyone updated is cos there was nothing happening and very little to update about.

I genuinely think this is the case rather than them intentionally deceiving their clients / ex-clients. Still, given they have stated about how vigorously they would be arguing this with HMRC, would love to know what’s currently happening their side, if anything at all.

I think they CK and Boox, though surprised would realise the serious nature of a HMRC inspection such as this one and should have communicated this to their clients. Whether they got answers or not they should have communicated rather than just adopting the 'it'll be fine' attitude (as most of involved in this seem to be taking too!)

At the very least they should have communicated to the directors of the Ltd companies they keep the books of this is happening, it's actually another example of how they could be seen as MSCP, instead of letting us individual directors decide what was best for our companies in light of the investigation they decided for us.

This is another reason why HMRC are rubbing their hands together

[cojak]

I have a feeling Boox and CK are as genuinely puzzled/shocked as we are.

However, I can't forgive them for not telling us three years ago, yes hundreds of us would have withdrawn from their services (something they are keen to avoid) but the human misery they have caused makes them IMHO as bad as those scheme providers from the EBT days.

Telling you what three years ago?

Their business model is no different from many other accountants out there. I expect the likes of InniAccounts, Clever Accounts, and all the others with their own portals are swallowing hard at the moment and keeping a keen eye on things.

(And let’s not get started with those ‘flex’ arrangement that allow you to ‘move seamlessly between Ltd and umbrella’.)

[GregRickshaw]

Telling you what three years ago?

Their business model is no different from many other accountants out there. I expect the likes of InniAccounts, Clever Accounts, and all the others with their own portals are swallowing hard at the moment and keeping a keen eye on things.

(And let’s not get started with those ‘flex’ arrangement that allow you to ‘move seamlessly between Ltd and umbrella’.)

Telling us there was an HMRC investigation of this magnitude going on (at the very least).

CK and Boox deciding not to tell the directors of the LTD companies on their books? Mmmm seems like another good example of control to me.

If as a director of my LTD company was aware of my book-keepers being investigated I may have wanted to make my own decisions on whether to continue with them.

[DealorNoDeal]

If CK and Boox were put under investigation as an MSCP three years ago then IMO it was definitely remiss of them not to communicate this with clients, even if they thought HMRC were just fishing.

Had folks known 3 years ago then they could have changed accountants to avoid putting yet more tax years at risk.

[Hareforthebear]

Telling us there was an HMRC investigation of this magnitude going on (at the very least).

CK and Boox deciding not to tell the directors of the LTD companies on their books? Mmmm seems like another good example of control to me.

If as a director of my LTD company was aware of my book-keepers being investigated I may have wanted to make my own decisions on whether to continue with them.

But they weren’t, (and are still not?), ‘being investigated’. Some of their clients had received enquiries from HMRC around this and they had assisted in their capacity as accountants.

[Hareforthebear]

If CK and Boox were put under investigation as an MSCP three years ago then IMO it was definitely remiss of them not to communicate this with clients, even if they thought HMRC were just fishing.

Had folks known 3 years ago then they could have changed accountants to avoid putting yet more tax years at risk.

So they should have effectively put themselves out of business for something that may not materialise into anything? would you?