Churchill Knight & Boox clients being investigated as Managed Service Companies

[DealorNoDeal]

...it looks like they can't be bothered to administratively restore closed companies.

Is it a lot of effort restoring closed companies?

Couldn't they have just kept the enquiries open, and left it until a later date to decide whether or not to restore the companies? Or is there a time limit on restoring companies?

I have to say, I'm surprised they've done this because they've effectively created a loophole for avoiding the MSC legislation in future. Doh!

[jamesbrown]

Is it a lot of effort restoring closed companies?

Couldn't they have just kept the enquiries open, and left it until a later date to decide whether or not to restore the companies? Or is there a time limit on restoring companies?

I have to say, I'm surprised they've done this because they've effectively created a loophole for avoiding the MSC legislation in future. Doh!

It depends on the method of closure. A company that was closed voluntarily is harder to restore because it needs a court order, and this would be the situation for many cases in the present context (contractors who closed their companies voluntarily and moved on). However, court orders can be obtained, obviously. I don't believe there's a time limit on that route, other than the usual HMRC time limits for transferring any liability, which would be the end goal (i.e., up to 20 years for negligence/fraud). An administrative restoration via CH (without a court order) is appropriate when non-compliance was the reason for closure and that has a 6 year time limit.

In other words, it isn't a trivial process and it is pretty pointless without a reasonable prospect of transferring a liability, but there was that possibility with the MSC legislation, so I am just as surprised. But I guess my surprise is misplaced because, as another poster noted, Paul Mason called this a while back. Perhaps there is enough ammunition for now with existing companies, but it does indeed raise the question you note about a loophole. There's nothing to stop others closing their companies (assuming they are not currently under investigation, in which case HMRC would presumably object).

[rabbleish]

I wonder if this is where the adverse publicity would kick in, and Hector has decided discretion is best.

Imagine a series of letters to MPs from former directors of voluntarily closed companies, closures which HMRC accepted, especially those within the time since the Costelloe decision.

HMRC would face some pretty intensive questions about what the hell they were doing.

Granted they could try and rely on the fact that this was a new angle of attack, but even then, it would look and feel like an intensive fishing expedition.

[eek]

I wonder if this is where the adverse publicity would kick in, and Hector has decided discretion is best.

Imagine a series of letters to MPs from former directors of voluntarily closed companies, closures which HMRC accepted, especially those within the time since the Costelloe decision.

HMRC would face some pretty intensive questions about what the hell they were doing.

Granted they could try and rely on the fact that this was a new angle of attack, but even then, it would look and feel like an intensive fishing expedition.

So far the only companies removed from
the list are those that don’t exist anymore - because they cost £2000 each to reinstate and it’s currently a gamble too far when this is just an attempt to extend the MSC rules

if you think hmrc would listen to an MP on something like this you really do need to think things through - the point at which an MP has a say is no where near where this case currently sits

[ns1]

if you think hmrc would listen to an MP on something like this you really do need to think things through - the point at which an MP has a say is no where near where this case currently sits

HMRC implement legislation enacted by Parliament (MPs). They are answerable to Parliament (MPs). If MPs raise concerns about the way HMRC is implementing (or interpreting) legislation, then HMRC cannot ignore this. If enough MPs raise the matter then HMRC could be called before Committee (eg. PAC, TSC). Ultimately, HMRC could be made to stop or alter their course of action, like in the case of the LC.

[GregRickshaw]

It's brilliant that so many MPs are involved and while I do think it's having a small effect and yes if there are enough to do that then it will have a ripple.

However, the biggest effect on this will be if the accountancy firms and the accountancy practice as a whole start to ask questions. At the moment I suspect it's not hurting them too much, if HMRC win though then it will as vast amounts of accountants will be opened up.

Remember also there were a vast number of MPs who were against the loan charge, whilst helping ultimately it failed to produce any changes.

My MP did my a solid for sure on this and too the DR schemes previously so keep talking to your MP

[DealorNoDeal]

Remember also there were a vast number of MPs who were against the loan charge, whilst helping ultimately it failed to produce any changes.

That's not true. Originally, the LC legislation applied to all loan schemes from 1999. The actions of MPs instigated the Morse review, which resulted in it being scaled back with a much later commencement date of Dec 2010.

[eek]

That's not true. Originally, the LC legislation applied to all loan schemes from 1999. The actions of MPs instigated the Morse review, which resulted in it being scaled back with a much later commencement date of Dec 2010.

9th December 2010 - i.e., the day the law changed regarding disguised remunerations.

Which is worth emphasising here - the only thing the MPs managed to do was to get the change to reflect the point at which UK law matched the issue at hand.

And that is no good for the MSC legislation because the law on that has been clear since 2004.

[Guy Incognito]

And that is no good for the MSC legislation because the law on that has been clear since 2004.

Not so clear as to avoid being wilfully stretched to the point of absurdity.

[eek]

Not so clear as to avoid being wilfully stretched to the point of absurdity.

I should have been clearer - the law has existed since 2004. How tax tribunals interpret and widen it is a different issue.