Churchill Knight & Boox clients being investigated as Managed Service Companies

[coxy]

There is always a solution but firstly. It's tough at the moment but remember too this initially is a company debt not personal yet.

Things haven't really progressed since last March to be honest but HMRC have deadlines to get determinations and claims to you to avoid the deadline being missed, seems they are pushing out all years now just to be certain. Annoying and worrying but not unexpected.

No test cases (tribunal) as yet but HMRC are looking at individual companies and applying MSC legislation correctly where they can, some of us who had multiple employees for instance, some of us who paid less than 50% of the income of the business have been removed from the 17/18 investigation (expecting the 18/19 to be removed too) and some companies who had been struck off have been released so there is some progress.

The first letter will be your determination of PAYE HMRC think they are owed, the second ones you are receiving will be for Employers NIC and your own NIC. Now remember at this stage these are HMRC estimating and not taking into account the amount of CT and Dividend Tax and your own NIC contributions you have already paid.

The thing you need to do is to get the NIC charges stood over (I'm assuming by now your 17/18 PAYE determination has been stood over?) if you can't do this yourself, CK have provided and will provide good templates for this, you should consider seeking the help of a professional such as David Kirk (he is relatively cheap compared to the other good alternatives and seems a good guy)

We have all been there and frustrated and mentally exhausted but remember the ultimate payment if we lose will be a lot less than what they are asking for now because they 'should' refund your CT, Dividend Tax and your own NIC you should not get double taxed.

If you are able to try to PoA from your company funds as this prevents interest and this case has a long way to go yet possibly 5 more years.

Ultimately too remember if we do lose and everything is proven there is always a way to get a long TTP so don't despair too much.

You mention maybe up to 5 years for the current cases to go through, so do we think HMRC will be looking at other accountants with a view to sending out more determinations before that date, or would they wait for the outcome?

[GregRickshaw]

You mention maybe up to 5 years for the current cases to go through, so do we think HMRC will be looking at other accountants with a view to sending out more determinations before that date, or would they wait for the outcome?

Personally I think they will start sending out to other accountancy bodies soon, if they wait they lose too much money potentially, they have nothing to lose by involving more accountancy practices.

Five years accounts for FTT UTT Supreme and constant appeals.

[GregRickshaw]

I've heard mention of PoA to prevent interest, but are they better directed to a specific class of NIC? Are these PoA, for example, to the usual income tax and class 4 NIC made at self-assessment, or for class 2 or 3 NIC only?

Pay on account means you are putting money aside into your account to pay the bill eventually that's all. You'll need to get a reference number from HMRC though to ensure the money is ring fenced for this case. HMRC will use money in your account to pay your corporation tax bill if they have it in your account and it's not ring fenced.

This POA is for your business not your own personal tax account SA etc.

[DealorNoDeal]

Five years accounts for FTT UTT Supreme and constant appeals.

Sadly, probably on the optimistic side. Bear in mind, after a tribunal/court hearing, it can take many months if not a year or more to get a judgment.

My guess:
FTT - 2024 (there's a huge backlog)
UTT - 2026
CofA - 2028
SC - 2030

[eek]

Sadly, probably on the optimistic side. Bear in mind, after a tribunal/court hearing, it can take many months if not a year or more to get a judgment.

My guess:
FTT - 2024 (there's a huge backlog)
UTT - 2026
CofA - 2028
SC - 2030

If anyone within hmrc has the ability to prioritize first tribunal cases this one will be in 2023 - they need a marker to allow the next set of companies to be kicked off

[Elder Flower]

So just to be clear since I have zero knowledge on all this. I am going to ignore the letter that Churchill Knight sent me to pay for their legal fees. I hope everybody is doing this. Then wait for the case outcome, if we are meant to pay HMRC we pay or go to jail. Or we win the case we dont pay HMRC we dont pay CK. Sorry all this is really confusing so I am going to watch and wait.

[DealorNoDeal]

If anyone within hmrc has the ability to prioritize first tribunal cases this one will be in 2023 - they need a marker to allow the next set of companies to be kicked off

More often than not, it's HMRC dragging their heels, and not getting their finger out, which causes excessive delays.

I don't know if they can prioritize tribunal cases but, when they're keen to see a case progress, it doesn't half go a lot quicker. The Hoey case is a good example of this.

BTW, I heard from someone recently, that they're already using the Hoey principle to target other scheme users.

[GregRickshaw]

So just to be clear since I have zero knowledge on all this. I am going to ignore the letter that Churchill Knight sent me to pay for their legal fees. I hope everybody is doing this. Then wait for the case outcome, if we are meant to pay HMRC we pay or go to jail. Or we win the case we dont pay HMRC we dont pay CK. Sorry all this is really confusing so I am going to watch and wait.

It's a school of thought you have for sure.

One which may work for you.

You may well have to represent yourself in court (if you want to fight) or as you say just pay the bill, if you are black and white on this, then you could PoA that way you have technically paid what HMRC say you owe and you can move on with your life.

Then keep your fingers crossed HMRC don't double tax you because you missed the appeals.

If HMRC win you have paid if they don't you at least get your money back, you won't get it back if you agree with the determinations and pay HMRC.

Be careful sitting back and doing nothing though (unless you are prepared to pay the entire bill double taxation and all) as you will need to put in a conditional claim for your Div Tax, your CT and your own NIC if you don't appeal those you will be double taxed.

Someone needs to raise the money for the FTT or it will be self representation on those first five cases.

CK are right to ask for a fund to brief barristers for the FTT, however in everyone's opinion they went about it the wrong way and for reasons unknown to us way too soon. It left a bad taste but it's the right course of action.

The legal fees are non refundable if the case is lost at FTT as there is no provision for costs to be awarded. So yes, the money to CK is 'dead money' but it is being used to support you and your case so it's a charge most (apparently) are willing to pay.

[Elder Flower]

Thanks. How can I find out what the majority are doing? Paying CK or just waiting to see the outcome?

[Elder Flower]

Really glad I found this thread, it's all very worrying and stressful. I have many questions and have asked for a virtual meeting with CK, Osborne Clarke and any of CK's clients that would like to join. Would people be interested in this? If I can show there's interest then hopefully they'll be more likely to organise it.

yes pls