Churchill Knight & Boox clients being investigated as Managed Service Companies

[Thehunter157]

I was trying to think of evidence I could gather to present that would help to prove that Boox haven't been running my company. Being terrible at house keeping I still have pretty much every email I have ever exchanged with Boox in the 8 years I have been with them. And, as I am totally hopeless with all things business, tax and accounts, there is a whole bunch of me asking idiot questions and them answering them. Do you think this is the sort of thing I need to be putting together? Obviously invoices are a bit different as I have been using their app to send them, but there is also a lot of dialogue between me and my customers chasing payment and generally arguing with them. Is this also the kind of thing you guys are putting together? Sorry if I'm asking dumb questions, I'm really confused about the whole thing and now Boox are not replying to emails and have the phone permanently on divert which is a great help.

[Builtthiscity]

My first post on this thread but I've followed for a while having been caught up in this. I wanted to echo recent thanks to those regular contributors. Like another recent post, I've spent the past week in particular feeling ill with anxiety over this situation and been on the verge of throwing it all in, and reading sensible advice and hearing of others in the same boat has helped.

Has anyone paid the reg 80 determination and have they reclaimed corporation tax and dividend tax? If so how long has that taken, or will that not be repaid until the whole case is complete and the appeal concluded?

Thanks again for all the advice and information from everyone here.

[eek]

I was trying to think of evidence I could gather to present that would help to prove that Boox haven't been running my company. Being terrible at house keeping I still have pretty much every email I have ever exchanged with Boox in the 8 years I have been with them. And, as I am totally hopeless with all things business, tax and accounts, there is a whole bunch of me asking idiot questions and them answering them. Do you think this is the sort of thing I need to be putting together? Obviously invoices are a bit different as I have been using their app to send them, but there is also a lot of dialogue between me and my customers chasing payment and generally arguing with them. Is this also the kind of thing you guys are putting together? Sorry if I'm asking dumb questions, I'm really confused about the whole thing and now Boox are not replying to emails and have the phone permanently on divert which is a great help.

Document everything and then go through it and try to work out what gives you the best story for you being in business on your own account - which means definitely keep the emails where you are chasing payment.

The ideal solution is those that chase payment alongside proof that you got your own outside IR35 reviews because that is showing due diligence on your own behalf.

[GregRickshaw]

I was trying to think of evidence I could gather to present that would help to prove that Boox haven't been running my company. Being terrible at house keeping I still have pretty much every email I have ever exchanged with Boox in the 8 years I have been with them. And, as I am totally hopeless with all things business, tax and accounts, there is a whole bunch of me asking idiot questions and them answering them. Do you think this is the sort of thing I need to be putting together? Obviously invoices are a bit different as I have been using their app to send them, but there is also a lot of dialogue between me and my customers chasing payment and generally arguing with them. Is this also the kind of thing you guys are putting together? Sorry if I'm asking dumb questions, I'm really confused about the whole thing and now Boox are not replying to emails and have the phone permanently on divert which is a great help.

Don't user vernacular like 'I am hopeless with everything and let them do that stuff' is the thing, if the court thinks you rely on Boox to run your company this is where the lines get blurred.

Asking questions of our accountant about business matters is fine.

Using their portal/app to produce your invoices is ok IMHO, them producing your invoices without you having an input is not.

Gather everything you can to show you were in charge. A directors loan maybe, a VAT fine, Invoices with your own logo on, business cards, dealings with end clients etc.,
Anything which proves you were paying yourself (and your employees) the amounts your business decided - not your accountant.

Little things too like own business address, actually knowing the name of the LTD (I know that sounds crazy but in the CBS case some of those poor sods didn't even know the name of their company). Own bank account set up, own company registration as much as you can.

I'm not saying any of that gets you out of jail but none of it can hurt.

I have no idea how Boox worked but as I have said many times CK did have this pay yourself this and that in 2013 but they quickly dropped it. Those things are a problem when they tell you how much to pay yourself.

[Thehunter157]

Thanks for the reply guys. Well one thing Boox did, and I'm assuming it works in my/our favour is, they used to ask you to set your own target of dividends for the year. And every year they send out an email asking what salary you wish to take, outlining the various thresholds and allowances. So I'm sort of hoping there's a fair amount of evidence out there that contradicts them managing a company. It shows how green I am with these things, I didn't even know that companies controlled other companies!

[rdw1970]

I have no idea how Boox worked but as I have said many times CK did have this pay yourself this and that in 2013 but they quickly dropped it. Those things are a problem when they tell you how much to pay yourself.

Before the new tax year and if your contract was outside of IR35, Boox suggested the most tax efficient salary to pay yourself. You could review and agree to their suggestion or set your own salary. As they're chartered accountants, I didn't see any issue with this and any director could research this information for themselves before setting the salary. Re:- Dividends, you could take what ever you wanted with no input or advice from Boox. Same for contributions to personal pensions.

[eek]

Thanks for the reply guys. Well one thing Boox did, and I'm assuming it works in my/our favour is, they used to ask you to set your own target of dividends for the year. And every year they send out an email asking what salary you wish to take, outlining the various thresholds and allowances. So I'm sort of hoping there's a fair amount of evidence out there that contradicts them managing a company. It shows how green I am with these things, I didn't even know that companies controlled other companies!

Wtf would you set in April a suggestion to the dividends you would take that year. Dividends should be being pulled from releasable (I.e. not needed for future business) profits which you may not know until far later in the year.

[GregRickshaw]

Thanks for the reply guys. Well one thing Boox did, and I'm assuming it works in my/our favour is, they used to ask you to set your own target of dividends for the year. And every year they send out an email asking what salary you wish to take, outlining the various thresholds and allowances. So I'm sort of hoping there's a fair amount of evidence out there that contradicts them managing a company. It shows how green I am with these things, I didn't even know that companies controlled other companies!

I personally think this is one the areas where the battle will be won or lost (that and the fees!)

An accountant are probably well within their professional capacity to give you guidance financially on tax efficient methods probably.... Them asking you to set your targets and then advise you how much to pay dependent on the targets is to be argued.

The experts seem to agree that can be argued. What is going to be tricky is the whole packaged product and the fee, the hands off approach I have seen the YouTube video of Boox's portal and it is fairly damning, to the experts and courts it may not be.

I was aware of MSC legislation but never in a 1000 lifetimes did I think it would apply to me, as it turns out it didn't for 17/18 so far anyway, but they still sent me the determinations.

It's going to be a very tough battle no matter what we think.

[Fred Bloggs]

I personally think this is one the areas where the battle will be won or lost (that and the fees!)

An accountant are probably well within their professional capacity to give you guidance financially on tax efficient methods probably.... Them asking you to set your targets and then advise you how much to pay dependent on the targets is to be argued.

The experts seem to agree that can be argued. What is going to be tricky is the whole packaged product and the fee, the hands off approach I have seen the YouTube video of Boox's portal and it is fairly damning, to the experts and courts it may not be.

I was aware of MSC legislation but never in a 1000 lifetimes did I think it would apply to me, as it turns out it didn't for 17/18 so far anyway, but they still sent me the determinations.

It's going to be a very tough battle no matter what we think.

I'm almost certain that if anyone is caught as an MSC, it's going to be those clients who deliberately bought into the fully supported hand holding service. Given all that's happened, I think it's virtually indefensible now at FTT and beyond.

[nekro]

I would interpret "consideration" as the amount charged to the client, excluding any VAT (if applicable). I could be wrong. These payments could be made as some combination of salary and dividends, for example.

I think this must be salary + dividends in which case I can't use this exemption