Churchill Knight & Boox clients being investigated as Managed Service Companies

[ns1]

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

Yes, and it should concern Parliament if HMRC are using legislation in a way that was never intended.

The Costelloe Isle of Man scheme was a clear example of the type of contrived avoidance the MSC legislation was intended to prevent. It beggars belief that the promoters thought that tweaking their original (pre-6th Apr 2007) scheme would get around the legislation but I doubt they cared that much; they stood to continue collecting £££££££ whether it succeeded or not.

CK/Boox is nothing like Costelloe. These are genuine accountancy firms providing services to independent companies.

[GregRickshaw]

Costellos was a slam dunk.

This is a swing and a..... (we don't know yet)

I did think it would produce an edge to first slip many times in this approach, which was perhaps their intention to drive LTDs to Umbrellas or even PAYE.

However, though I am out of the industry (IT) and loop these days, most former contractors I know have just carried on with whatever they were doing before (brolly or PSC). So not sure the scare tactic worked.

It may have sent a few CK and Boox clients to other accountants and to things like Free Agent.

Maybe they needed money in their bank to buy stuff with.

[Fred Bloggs]

Yes, and it should concern Parliament if HMRC are using legislation in a way that was never intended.

The Costelloe Isle of Man scheme was a clear example of the type of contrived avoidance the MSC legislation was intended to prevent. It beggars belief that the promoters thought that tweaking their original (pre-6th Apr 2007) scheme would get around the legislation but I doubt they cared that much; they stood to continue collecting £££££££ whether it succeeded or not.

CK/Boox is nothing like Costelloe. These are genuine accountancy firms providing services to independent companies.

Really? Only 5 seconds ago I copied this from CK's website -

We have carefully constructed our limited company packages to suit contractors and freelancers at each career stage. If you want to take care of some of the work yourself or prefer a completely hands-off approach, you have the option to choose.

Not helpful, is it? What's that say about CK?

[mogga71]

Really? Only 5 seconds ago I copied this from CK's website -



Not helpful, is it? What's that say about CK?

Jeeze that is quite frightening isnt it?

[GregRickshaw]

The irony being that kind of package offering is fairly new.

It was not around when many of the companies under investigation started up, certainly when I started mine and although I did not go for any kind of assisted accountancy I still got caught up in the investigation.

Guilty by association of CK or Boox being the P in the MSCP.

[jamesbrown]

Jeeze that is quite frightening isnt it?

And they haven't changed it since (close to) the start of this thread, but I guess it's pointless now, they've shot themselves with their PR/advertising, likewise Boox who have an even worse hand-holdy video out there. Looking at the advertising on its own, they would be stuffed, but it probably won't matter that much for those customers who used them for vanilla accountancy (TBD).

[GregRickshaw]

Maybe they are as confident today as when they started to offer that service as they were then.

I suspect suddenly removing that message/service though may make them look a little more guilty?

From my recent dealings with CK, who have been superb through all of this, is they seem to be growing in confidence of getting more LTDs removed from the investigation.

[eek]

Maybe they are as confident today as when they started to offer that service as they were then.

I suspect suddenly removing that message/service though may make them look a little more guilty?

From my recent dealings with CK, who have been superb through all of this, is they seem to be growing in confidence of getting more LTDs removed from the investigation.

I'm sure CK are confident.

Equally I'm sure HMRC are happy to remove awkward examples from the case - as the whole point of this MSC case is to confirm (and slightly extend) where the CBS tribunals ended things at.

[Fred Bloggs]

And they haven't changed it since (close to) the start of this thread, but I guess it's pointless now, they've shot themselves with their PR/advertising, likewise Boox who have an even worse hand-holdy video out there. Looking at the advertising on its own, they would be stuffed, but it probably won't matter that much for those customers who used them for vanilla accountancy (TBD).

My thinking from the start is that those clients of CK and other accountants offering premium services beyond vanilla book keeping are MSCP for those customers. And the customers are therefore MSC. If Hector is going to have any chance of raising revenue under MSC legislation, pretty much all they need to do is request the details of clients who signed up for the premium service. If that happens, it's going to be very hard to defend. But by extension, I always maintained those on vanilla book keeping arrangements have little to worry about. Will that come to pass? It's perhaps too simple for the strategy to be adopted. But I really do think Hector would probably win the case.

[ns1]

HMRC are looking for a "catch all", not a "catch some of". OK, a "catch some of" is better than nothing but it's not what they were after.

If you look at the history of Costelloe, you can see why that was the perfect "catch all". Prior to 6th April 2007, it consisted of about half a dozen or so composite companies, with each company having about 100 employees receiving small salary and dividends. In an attempt to get around the MSC legislation, Costelloe created 1000 or so individual PSCs and moved the employees from the composites to these. The deal made with the contractors was that they'd barely notice any difference; Costelloe would take care of everything.

HMRC could be totally confident that what applied to one Costelloe PSC, applied to all PSCs. As they are now probably discovering, the same cannot be said of CK/Boox. HMRC could cherry pick the most MSC looking examples to take to tribunal but, even if they won, others could legitimately claim different individual circumstances, which then turns it into a bit of an IR35 like crap shoot, which is absolutely not what they wanted.

Anyway, only time will tell how this pans out.