Churchill Knight & Boox clients being investigated as Managed Service Companies

[GregRickshaw]

But, exactly that.... it's so preposterous that we no longer know what's a joke or sarcasm. This whole thing is just a mess.

Imagine if HMRC wins this (very likely according to most) and if they do... Gorilla Accounting, Parasol, PayStream, The Accountancy Partnership, Debitam, to name a few, will all be under investigation (and most likely found as an MSCP and we know what happens to the contractors). And, just think about the number of contractors involved at that point, we will be talking hundreds of thousands, who will all be in debt of £100K plus.

I know we moan there isn't a big enough spotlight on this injustice (for CK and Boox peeps), but if the above happens, I can only imagine this creating shockwaves in not only the contracting industry but on a more mainstream level. I just cannot see it happening. Too many are affected at astronomical costs and majority, if not all, actually paid their taxes as per the rules. They / we played by the book.

No one cares about the contracting industry outside of contractors, we are all seen as tax dodgers and nothing else. The biggest spotlight we've had so far is a small piece in the FT Money section and Computer Weekly. To many we have not been seen to play by the book by being a PSC/LTD.

Why do we think no one cares about the Loan Charge outside of our world?
If you speak to anyone outside of our bubble, the vast majority of the world would have zero sympathy for anyone using tax avoidance.

The only way this fails on HMRC's part is, if it affects the wider accountancy industry and the vested interests of some senior politicians. The only way this gets any kind of support is when the accountants of the world unite here, highly unlikely. From what we know CK and Boox can't even work together to it's all been left to CK.

Just because HMRC (and I agree they will) win this, however does not automatically mean they will investigate all the other big firms, it took them nearly 10 years to get these three years in focus. Agreed they will now have a much stronger case than the Costello ruling but it won't automatically follow.

Also remember HMRC can't lose here, they will have already sent thousands of contractors running from CK and Boox into brollies and PAYE and who knows how many not involved with CK and Boox are now in brollies. So HMRC have already won to a large degree.

[Fred Bloggs]

Just that HMRC are targeting those with in-house tools.

Exactly. To be avoided. In house custom built portals were always a very poor idea, even more so now Hector has them in his sights.

[Raptors88]

My biggest frustration comes from the fact that i am not even a contractor...i run a consultancy (multiple clients at same time/different projects/proposals/marketing etc. + subcontractors), i just happen to use churchill knight as they looked like competent accountants with a clean portal to organise my financials. And yet still am caught up in all this.

This is not to say that i do not feel sympathy for contractors (who certainly deserve to reap the rewards of taking on risk not associated with being an employee)

[Fred Bloggs]

My biggest frustration comes from the fact that i am not even a contractor...i run a consultancy (multiple clients at same time/different projects/proposals/marketing etc. + subcontractors), i just happen to use churchill knight as they looked like competent accountants with a clean portal to organise my financials. And yet still am caught up in all this.

This is not to say that i do not feel sympathy for contractors (who certainly deserve to reap the rewards of taking on risk not associated with being an employee)

Presumably you have told HMRC that? I said way back that the way this is going, hairdresser and sweet shop businesses would be MSCs too if they used CK for accounts. It's really crazy to imagine at that level.

[Hareforthebear]

My biggest frustration comes from the fact that i am not even a contractor...i run a consultancy (multiple clients at same time/different projects/proposals/marketing etc. + subcontractors), i just happen to use churchill knight as they looked like competent accountants with a clean portal to organise my financials. And yet still am caught up in all this.

This is not to say that i do not feel sympathy for contractors (who certainly deserve to reap the rewards of taking on risk not associated with being an employee)

If you have multiple subcontractors you are paying then you are not a PSC and cannot be deemed an MSC surely? As to be an MSC you must first be a PSC.

[jamesbrown]

If you have multiple subcontractors you are paying then you are not a PSC and cannot be deemed an MSC surely? As to be an MSC you must first be a PSC.

A PSC is not defined in law. That said, we’re at the stage of this process whereby the individual client companies have not yet been scrutinised. When that happens, I find it hard to see how the bar for being “involved with” the client (and perhaps even the more basic conditions of liability) will be met for true consultancies or, indeed, other traditional businesses.

[GregRickshaw]

My biggest frustration comes from the fact that i am not even a contractor...i run a consultancy (multiple clients at same time/different projects/proposals/marketing etc. + subcontractors), i just happen to use churchill knight as they looked like competent accountants with a clean portal to organise my financials. And yet still am caught up in all this.

This is not to say that i do not feel sympathy for contractors (who certainly deserve to reap the rewards of taking on risk not associated with being an employee)

Well if you did that then you are off the hook, I have documented here exactly why I was off the hook for 17/18 and 18/19 because I ran my business as a consultancy practice with multiple employees. HMRC have recognised this and for 17/18 so far removed my company from the investigation, they should do the same for 18/19.

Get onto your tax advisor or HMRC directly and have this pointed out. I am really surprised CK have not done this for you.

No date on returning my PoA money though, in fact last time we chased it they were extremely vague about who exactly had it despite having it ring fenced to this investigation.

[gikap]

This may sound like a silly question but i just have to ask. Is it possible to return dividends back to my company for years (2017/18, 2018/19) involved in HMRC MSC lawsuit and therefor reduce amount of money HMRC is after?

Also, are there any good templates or examples or recommendations for appeals to HMRC determinations? I was with Boox, i am on my own for everything.

[jamesbrown]

This may sound like a silly question but i just have to ask. Is it possible to return dividends back to my company for years (2017/18, 2018/19) involved in HMRC MSC lawsuit and therefor reduce amount of money HMRC is after?

Also, are there any good templates or examples or recommendations for appeals to HMRC determinations? I was with Boox, i am on my own for everything.

No, not possible.

As an aside, it won't reduce anything because PAYE/NI tax was not paid at the time so interest will accrue and dividend tax paid will be offset, eventually (most likely).

[GregRickshaw]

This may sound like a silly question but i just have to ask. Is it possible to return dividends back to my company for years (2017/18, 2018/19) involved in HMRC MSC lawsuit and therefor reduce amount of money HMRC is after?

Also, are there any good templates or examples or recommendations for appeals to HMRC determinations? I was with Boox, i am on my own for everything.

I would highly doubt it, you are talking about putting money back into your business account from your personal account?

Remember though the determinations at the moment are not inclusive of the CT and the DT you have paid, if HMRC win this they SHOULD refund all the CT and DT you have paid, or they will be double taxing you, HMRC have confirmed then ummmed then errred and then not quite confirmed they will give the money back yet but... we can hope.