Churchill Knight & Boox clients being investigated as Managed Service Companies

[DealorNoDeal]

The section in the letter about NI seems to read to me that they’re still on the fence about this all.

Which is probably one of the reasons why they haven't been letting people settle. Settlement is full and final, and obviously they can't offer that if things are still up in the air.

Btw, if anyone does want to settle, and HMRC won't let you, go and see your Member of Parliament. MPs have a way of cutting through HMRC intransigence.

Personally, though, I wouldn't settle at the moment. I think there's a decent chance HMRC are going to lose this one. If you're worried about interest accruing then just make payments on account.

[mogga71]

So back to the question at hand what could be the best option given; timescales, likelihoods and risk appetite.

Despite sincere disagreement of accusations by nearly all parties at this stage, could this be less costly for many outcomes to settle early. The only way I see this costing less than addressing it now is if CK/Boox are not proven to be MSCPs. In that case is the settlement value now for 4 years worthwhile based on the serious cost of waiting this out?

Worst case scenario is that HMRC win this and because people chose fight it or see what happens they incur; interest (this could run for years), refusals from tax reclaims due to passed deadlines (already talk about this being in dispute and more years would pass), large legal/tax fees for advice and representation.

If corporation tax payments are not successfully reclaimed due to timescales than this would likely cost more than fighting the whole thing potentially and winning... Or they would least have a serious impact. So yes, you could pat yourself on the back if you refute HMRC, but in reality it simply cost you more anyway because your time window for corporation tax reclaims has ended, nevermind the interest.

This could all be avoided begrudgingly with settlement early before it even runs, or at least when we know a little bit more about it... Thoughts?

So let's see if I have got this right.

1. HMRC could drag this out for years and for every year passed they charge 13% interest if you don't make a on account payment.
2. For the poor people who make that on account payment .. but HMRC eventually loses the case ... they instead get a mere 1% interest back.
3. The people may not get their Corp tax payments back due to HMRC taking so long with point 1.
4. All this because the poor folk chose the wrong accountant at the wrong time and the accountants may have 'evolved' their services since the said folk signed up.

HMRC make Bernie Madhoff look like a rank amateur and a model citizen.

[DealorNoDeal]

So let's see if I have got this right.

1. HMRC could drag this out for years and for every year passed they charge 13% interest if you don't make a on account payment. No! It's currently 3.5% per year. (The 13% was an estimate of the interest that has already accrued in the past 4-5 years for 2017/18)
2. For the poor people who make that on account payment .. but HMRC eventually loses the case ... they instead get a mere 1% interest back. Actually 0.5% per year.

See above.

[GregRickshaw]

Just a word about settlements/interest rates etc.,

We are nowhere near settlements yet but for comparison and I don't want to get hopes up here.

When I got myself (yes myself that time) involved in the Tax Avoidance schemes I did settle with HMRC.

I did use Tax Lawyers to negotiate and one of the outcomes was they (HMRC) wrote off the interest and the late payment fees and the interest on those too in the final settlement figure. Again not saying there will be settlements here but maybe this applies to interest if you don't have the money right now to pay on account.

I do believe the tax lawyers did this for me but probably could do it yourself.

I then went to my MP and asked her to negotiate with HMRC if I could have a elongated TTP (initially I got 10 years I have since reduced this and now have paid off the debt). Whatever bill you face there are ways to pay which won't totally wreck your life.

[DealorNoDeal]

AFAIK, HMRC only waived the interest with loans where settlement was by voluntary restitution.

https://www.hwtaxcompliance.co.uk/voluntary-restitution

That won't apply here because HMRC have protected the years by raising assessments within the 4-year window.

[Guy Incognito]

All this really means is if you offer HMRC to pay PAYE for the 2016/2017 year they missed, they won't charge you interest!

[DealorNoDeal]

All this really means is if you offer HMRC to pay PAYE for the 2016/2017 year they missed, they won't charge you interest!

Yep. Loans was an unusual situation where it made sense to settle years they missed because it avoided getting hit by the loan charge.

[eek]

Yep. Loans was an unusual situation where it made sense to settle years they missed because it avoided getting hit by the loan charge.

But only for loans - and nothing here is a loan...

[DealorNoDeal]

But only for loans - and nothing here is a loan...

Correct.

I guess one small blessing is that HMRC are only able to go back 4 years.

[Schnurdle]

Spotted this yesterday.
Secret Contractor: How HMRC’s MSC investigation ruined my weekend and took over my life

Armed with my research and advice from IPSE, I’ve managed to get the first years determination overturned.