Churchill Knight & Boox clients being investigated as Managed Service Companies

[GregRickshaw]

https://www.gov.uk/hmrc-internal-man...manual/esm3625

Note the ordering and the conditions for moving from (1) to (2) or (3). A "transfer" of debt means a transfer from where it falls first, which is the MSC. So, it will go to the director(s) of the MSC first. It's unlikely it won't be recovered at that point.

Yeah I get it, just the way it read was a little bit strange.

However it does seem though there will be a lot of debt going back to CK and Boox as there will be directors of companies who have no tangible assets and savings, there will be utter one person PSCs who's director is long gone. I do get now why CK in particular are so invested in this, they haven't wound up their business and there are going to be big debts heading their way.

In some ways the debt transfer being how it is with providers on the hook is a actually a good thing.

[mogga71]

Yeah I get it, just the way it read was a little bit strange.

However it does seem though there will be a lot of debt going back to CK and Boox as there will be directors of companies who have no tangible assets and savings, there will be utter one person PSCs who's director is long gone. I do get now why CK in particular are so invested in this, they haven't wound up their business and there are going to be big debts heading their way.

In some ways the debt transfer being how it is with providers on the hook is a actually a good thing.

Sorry Rick ... i dont get you? What do you mean by that? Do you mean they will be dead? Surely HMRC will go after the individuals who are or who were the directors of the MSC's and surely most of them will still have money...or are you saying that if you are not a director of the company anymore then you are free?

[GregRickshaw]

** sorry just seen someone else has already posted this **

this doc list the categories of transfer:-

1. The director, or other office holder or associate of the MSC
2. The MSC Provider or the director, or office holder or associate of the MSC Provider
3. Any other person who directly or indirectly has encouraged or been actively involved in the provision by the MSC of the services of the individual, or a director, or other office holder or associate of such a person.

I'm sure if you were broke, they would still try their best to set up a payment plan to at least get something from you.

Changing the subject, I received an email from Hector today showing the calculations for their determination figure which I requested in my appeal email.
The calculation showed Corporation Tax and any PAYE already paid were deducted from the Deemed Employment Payment but not Self Assessment.

It also showed the Employer's NI figure too. No mention of Employees NI though.

Yes I got that and as I say there will be PSC (Ltds) who had one director, no associates who had anything to do with the Ltd. Some directors will be long gone. Of the thousands under investigation there are going to be a fair number who HMRC have zero chance of getting anything from.

Interesting about the letter you have with the amounts removed, more interesting you have your NI figure too, CK have just reported they don't expect the NI letters to arrive any time soon.

I imagine the figure dropped quite considerably from the original figures. I know mine did (using CK's calculators).

[GregRickshaw]

Sorry Rick ... i dont get you? What do you mean by that? Do you mean they will be dead? Surely HMRC will go after the individuals who are or who were the directors of the MSC's and surely most of them will still have money...or are you saying that if you are not a director of the company anymore then you are free?

I imagine there will be a few deceased yes, I imagine there will be many more gone back to their home countries. I worked alongside many who were not from this country but had LTD companies and used accountants such as CK. HMRC will go after the MSCP rather than chase those.

Will they have money though? We assume everyone involved has a mortgage/house etc., a contractor lifestyle for some means renting and roaming free who knows. For me I am encouraged the MSCP is on the hook means they may provide more help.

No the director thing doesn't work as proved in the case. Though in that case I think he resigned once the case was started. I wonder if you resigned as a director prior to the case, so no ongoing dispute/no investigation.

[rdw1970]

Yes I got that and as I say there will be PSC (Ltds) who had one director, no associates who had anything to do with the Ltd. Some directors will be long gone. Of the thousands under investigation there are going to be a fair number who HMRC have zero chance of getting anything from.

Interesting about the letter you have with the amounts removed, more interesting you have your NI figure too, CK have just reported they don't expect the NI letters to arrive any time soon.

I imagine the figure dropped quite considerably from the original figures. I know mine did (using CK's calculators).

Yes I asked for the NI figure in my appeal (without committing to paying it)

The fact they have already taken the CT into account, does this not make the conditional claims redundant now?
My self assessment was virtually all from dividend payments so surely this should also be taken into consideration?

I was reminded in the email that the determinations have been calculated using best judgment based on information held and this can be changed as more facts and information are gathered.

[GregRickshaw]

Yes I asked for the NI figure in my appeal (without committing to paying it)

The fact they have already taken the CT into account, does this not make the conditional claims redundant now?
My self assessment was virtually all from dividend payments so surely this should also be taken into consideration?

I was reminded in the email that the determinations have been calculated using best judgment based on information held and this can be changed as more facts and information are gathered.

It's a moot point about the conditional claims and hopefully they have calculated yours with CT and dividends now removed to come with a final figures. Just recently HMRC have stated they won't look at conditionals until the case is closed by which time it will be too late to claim so effectively HMRC will apply double taxation (back to the original figure basically).

[cojak]

As people may not notice this article I will point it out here Directors, HMRC V Gradidge proves naivety is no excuse if MSC debts get transferred to you (contractoruk.com)

It relates to transfer of MSC debts to a director (who claims to have not even realised he was a director).

*cough*

Check if the ‘Umbrella’ has made you a director of a Ltd company! - Contractor UK Bulletin Board

[Guy Incognito]

I received an email from Hector today showing the calculations for their determination figure which I requested in my appeal email.
The calculation showed Corporation Tax and any PAYE already paid were deducted from the Deemed Employment Payment but not Self Assessment.

It also showed the Employer's NI figure too. No mention of Employees NI though.

Was this an Excel sheet or just a printed copy?

Have you been able to successfully re-engineer the figures they came up with?

How did they approach the apportionment of company years to the tax year 2017/18?

[Guy Incognito]

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.

Would CK request the judicial review for all those effected or is it every man for himself?

[Guy Incognito]

The optimist in me says they are declining because they don't have the manpower and that they intend to allow it but obviously can't say that...