Churchill Knight & Boox clients being investigated as Managed Service Companies

[eek]

Total cock up by the lawyers and advisors then regarding the Corporation tax claims. Seems we can't make conditional claims until the cases are closed (won or lost) if we win then of course it won't matter. Won't stop there being a HUGE bill hanging over our heads with no guarantees.

Latest update on CK portal.

You can't claim relief until after the case is closed and lost/won. HMRC may not accept late claims.

Good news is a few clients have had their cases closed down.

That's about it really just bad news basically.

I would still be getting the letter in now.

Because were you to lose and HMRC decided to be arsey on the corporation tax side demonstrating you did everything and it's HMRC being arsey would make it easier for your MP to plead mitigation...

[stuckWithCK]

Good news is a few clients have had their cases closed down.

Is there any more information on these closed cased? What was the criteria?

[GregRickshaw]

Latest update from CK:

TL;DR

CT claims can be submitted until 31st January 2024 but can't be done until after the case is closed.

Very likely no resolutions before 2024 (based on glacial speed), when we lose in 2025 we will not be able to submit the CT tax claim as we will have missed the date.

We can submit a late claim, but HMRC are not obliged to meet it! So then we have to take them to court to prove they have knowingly double taxed us.

Chilling reminder HMRC are deadly serious about their chances of winning.

Full (below)

We have received confirmation from HMRC that the deadline for corporation tax claims will be 5 years after the 31st of January following the tax year in which the distribution is made. For example, the deadline for the 2017/18 tax year is the 31st of January 2024. This is good news. However, please take the rest of this update into consideration.
HMRC have said – “it is not possible to register an interest to claim relief at a later date”
In a recent message to us, HMRC confirmed – “it is not possible to register an interest to claim relief at a later date”. This means that you cannot submit conditional claims now to ask for this relief if you lose your MSC case. Instead, you would need to wait for the case itself to be closed before you can submit a claim for Corporation Tax overpayment relief.
Taking the latest developments into consideration, if you have already put through a corporation tax claim, it will not be accepted and you will need to do it again once the case is closed.
We understand this information goes against the advice we have shared so far and would like to apologise for any inconvenience this may have caused. We recommended submitting these conditional claims based on advice from our lawyers and the information we had from HMRC at the time (which was that the deadline for these claims had either already expired, or was expiring soon).
We were also of the belief that HMRC would act logically by accepting these additional claims now to avoid companies being double-taxed in the event the cases were not closed before the 31st January 2024.
We have contended this information with HMRC
It is our opinion that if HMRC allow the cases to go beyond 31st January 2024 (without allowing conditional claims for Corporation Tax Relief), then they will be knowingly double-taxing companies. We believe this is completely unfair and we therefore asked them to clarify what clients should do in this situation.
As things stand, HMRC have stated: “the option available to your client companies at the point the time limit for a claim under section 61H ITEPA 2003 expires would be to make a late claim to overpayment relief.”
This effectively means making the Corporation Tax claim after the case is closed even if this is after 31st January 2024. They have however provided no assurances that these late claims would be accepted but stated that where the late claim was not accepted – you would have the right to request a Judicial Review. Effectively, this means you would need to launch a claim that HMRC have acted unfairly.
As soon as more information is available, we will share it with you
As stated above, we are challenging HMRC regarding corporation tax claims because we think they are acting unfairly. We have also mentioned that it is not fair of HMRC to change the information they share with us because we share it with you immediately.
Some of our clients have had success contacting their MP for support
We have received some information from clients who have taken this case to their MPs to seek support and ask for help closing it down. Some MPs have proactively been putting pressure on HMRC. Therefore, it is entirely up to you, but contacting your MP and outlining your dissatisfaction with this case could help put pressure on HMRC.

[mogga71]

Latest update from CK:

TL;DR

CT claims can be submitted until 31st January 2024 but can't be done until after the case is closed.

Very likely no resolutions before 2024 (based on glacial speed), when we lose in 2025 we will not be able to submit the CT tax claim as we will have missed the date.

We can submit a late claim, but HMRC are not obliged to meet it! So then we have to take them to court to prove they have knowingly double taxed us.

Chilling reminder HMRC are deadly serious about their chances of winning.

Full (below)

We have received confirmation from HMRC that the deadline for corporation tax claims will be 5 years after the 31st of January following the tax year in which the distribution is made. For example, the deadline for the 2017/18 tax year is the 31st of January 2024. This is good news. However, please take the rest of this update into consideration.
HMRC have said – “it is not possible to register an interest to claim relief at a later date”
In a recent message to us, HMRC confirmed – “it is not possible to register an interest to claim relief at a later date”. This means that you cannot submit conditional claims now to ask for this relief if you lose your MSC case. Instead, you would need to wait for the case itself to be closed before you can submit a claim for Corporation Tax overpayment relief.
Taking the latest developments into consideration, if you have already put through a corporation tax claim, it will not be accepted and you will need to do it again once the case is closed.
We understand this information goes against the advice we have shared so far and would like to apologise for any inconvenience this may have caused. We recommended submitting these conditional claims based on advice from our lawyers and the information we had from HMRC at the time (which was that the deadline for these claims had either already expired, or was expiring soon).
We were also of the belief that HMRC would act logically by accepting these additional claims now to avoid companies being double-taxed in the event the cases were not closed before the 31st January 2024.
We have contended this information with HMRC
It is our opinion that if HMRC allow the cases to go beyond 31st January 2024 (without allowing conditional claims for Corporation Tax Relief), then they will be knowingly double-taxing companies. We believe this is completely unfair and we therefore asked them to clarify what clients should do in this situation.
As things stand, HMRC have stated: “the option available to your client companies at the point the time limit for a claim under section 61H ITEPA 2003 expires would be to make a late claim to overpayment relief.”
This effectively means making the Corporation Tax claim after the case is closed even if this is after 31st January 2024. They have however provided no assurances that these late claims would be accepted but stated that where the late claim was not accepted – you would have the right to request a Judicial Review. Effectively, this means you would need to launch a claim that HMRC have acted unfairly.
As soon as more information is available, we will share it with you
As stated above, we are challenging HMRC regarding corporation tax claims because we think they are acting unfairly. We have also mentioned that it is not fair of HMRC to change the information they share with us because we share it with you immediately.
Some of our clients have had success contacting their MP for support
We have received some information from clients who have taken this case to their MPs to seek support and ask for help closing it down. Some MPs have proactively been putting pressure on HMRC. Therefore, it is entirely up to you, but contacting your MP and outlining your dissatisfaction with this case could help put pressure on HMRC.

Not quite sure about 'Chilling reminder HMRC are deadly serious about their chances of winning.' I still reckon you guys will win.

An absolute disgrace though how it is even on the cards that they can double tax these people this way.

[jamesbrown]

This is not terribly surprising. We know from IR35 cases that they do not automatically offset the taxes owed against the taxes paid and not reclaimed before a deadline (notably CT), but a tribunal judge can be asked to rule on quantum. Actually, anything different (like being able to pre-register a CT refund) would've been very odd.

[eek]

Not quite sure about 'Chilling reminder HMRC are deadly serious about their chances of winning.' I still reckon you guys will win.

An absolute disgrace though how it is even on the cards that they can double tax these people this way.

I've recently had chats with an awful lot of tax experts and all of them are of the opinion that both CK and Boox are, sadly, rather screwed...

[DealorNoDeal]

I've recently had chats with an awful lot of tax experts and all of them are of the opinion that both CK and Boox are, sadly, rather screwed...

If that's true, then a lot of other contractor accountants and their clients are likely to be screwed.

If HMRC succeed with CK and Boox, they are bound to have a pop at others, even if that means having to stretch the interpretation of MSC even further.

[eek]

If that's true, then a lot of other contractor accountants and their clients are likely to be screwed.

If HMRC succeed with CK and Boox, they are bound to have a pop at others, even if that means having to stretch the interpretation of MSC even further.

Remember the whole point of these cases is to stretch the interpretation very, very slightly in different directions to widen the scope.

[GregRickshaw]

I've recently had chats with an awful lot of tax experts and all of them are of the opinion that both CK and Boox are, sadly, rather screwed...

Yip! In my mind there is no doubt they both have been MSCP. The tiers/service levels they introduced long after I joined will be the reason.

This is why I am getting ready to prove I am not one of the MSC.

I have a good case I believe, guilt by association is what I have to throw off and I will.

Incidentally I was recently chatting with a fellow CK client and they did not receive a determination at all, and I have to say they seemed to let CK run a vast majority of their business.

[DealorNoDeal]

Remember the whole point of these cases is to stretch the interpretation very, very slightly in different directions to widen the scope.

CBS (dodgy IoM scheme) -> CK/Boox is a bit more than "very, very slightly".