Churchill Knight & Boox clients being investigated as Managed Service Companies

[eek]

The owner of an accounting firm actually said this:

Worth posting a tiny bit more so we can see whose codes of compliance the owner thinks is enough,.

...the FSCA’s codes of compliance. Significantly, these codes were agreed with HMRC on the basis that compliance with the code was a clear indication that the company was not a MSCP.

Sorry but I have multiple reasons not to agree...

[Lotok]

I just got a £100 penatly notice through for Boox failing to submit my company return on time for 2021, despite me authorising and paying them to do so. Unrelated to the MSC stuff but seriously f**k Boox.

[mno]

I am in the same boat as others with CKA where I contracted from 2017-2020 and received notices as well as NIC payments due. I was advised to to appeal which I did for 2017-2018 and now appeal for the latest notices too and pay on account (so money can come back if case goes away).No one knows the certainty of this happening ?

Appeal window closes after tomorrow but I am not sure whether I should appeal (or appeal anyway) and PoA ? Is there a time window for the payments to settle or pay on account - if yes what is the time limit ?

I have money in account that I can use to pay tax notices PAYE for 3 years and notice for NI but anymore than that will be problematic. Can they ask for more money considering these amounts being their best judgement (although over valued).

Can they request for my company to be a test case or how is a test case decided? If all of this was taken to courts would that mean more financial liability, court/lawyer payments ?

How quick can things move if the appeals are done firstly ? Can HMRC rush to tribunal I do not know. Can you pull back an appeal if you change your mind or its not a good idea to appeal in the first place?

I cannot close the company as liabilities are due or draw any dividends as not sure what further monies HMRC might ask for.

Is there a way to ascertain how much tax was actually due for past 3 years in question? I know to an extent the ctax and d-tax paid but now with the new notices for PAYE and NI I am certain that goes above what would have been actually due?

If you are paying to settle and not PoA - does that mean then one is accepting they regard MSC to apply ? If you PoA then there is not going to be any closure anytime soon ( or its wrong to say there will be a closure and HMRC can come back for more)

jamesbrown eek GregRickshaw

[Guy Incognito]

You must appeal. If you do not appeal with the 30 day window you legally owe the money regardless of anything that happens in court in the future.

[GregRickshaw]

I have money in account that I can use to pay tax notices PAYE for 3 years and notice for NI but anymore than that will be problematic. Can they ask for more money considering these amounts being their best judgement (although over valued).

They are unlikely to ask for more money as they have over estimated in most cases anyway. However they will ask for more money eventually by charging interest and considering this is unlikely to end much before 2026 it will be a LOT of interest. The only hope for reductions is... HMRC don't insist the double taxation was fair (your CT, your DT and your own NIC) etc.,

If you have the money then PoA as it will save £000s in interest. Most do not have the luxury of surplus cash to those amounts.

Can they request for my company to be a test case or how is a test case decided? If all of this was taken to courts would that mean more financial liability, court/lawyer payments ?

Yes they can, however if you are with CK, HMRC and CK are working together on this to decide the cases, HMRC though do not have to ultimately agree.

How quick can things move if the appeals are done firstly ? Can HMRC rush to tribunal I do not know. Can you pull back an appeal if you change your mind or its not a good idea to appeal in the first place?

HMRC are not rushing anything as glacial pace suits them, don't believe for a minute they don't know what they are doing by dragging this on. They literally have nothing to lose by torturing you for years.

I cannot close the company as liabilities are due or draw any dividends as not sure what further monies HMRC might ask for.

Is there a way to ascertain how much tax was actually due for past 3 years in question? I know to an extent the ctax and d-tax paid but now with the new notices for PAYE and NI I am certain that goes above what would have been actually due?

You can take a rough guess, a bit like HMRC have done, by multiplying the NIC for each year or if HMRC have sent you a total for the three years and that's roughly what you'll have to pay (that is of course if they don't double tax you, so far it's been NO double tax, YES tough double tax to We're not sure yet.

If you are paying to settle and not PoA - does that mean then one is accepting they regard MSC to apply ? If you PoA then there is not going to be any closure anytime soon ( or its wrong to say there will be a closure and HMRC can come back for more)

Yes and who on earth knows

jamesbrown eek GregRickshaw

GR

[Fuzzynavel]

I have been lurking for a while but finally decided to post.

I was contacted by HMRC back in October 22 regarding BOOX. I wrote back to them by email and cited a ton of information and gave them lots of attachments showing my independence from influence. I received a message back acknowledging receipt and saying that a caseworker would review my case.

Fast forward to the 24th February 2023 and I get a demand for £30k Employer NICs and £25k Employee NICs based on BOOX being a Managed Service Company Provider.

My company incorporation, bank account, VAT registration and first contract were all active before I contacted BOOX.

HMRC's argument seems to revolve around BOOX being a Managed Service Company Provider and that I am "Involved" with them...Which is a load of S**t.

They are using the definitions in ITEPA 2003 Ch9 61B(1) to tar me with the MSC brush. ITEPA 2003 Ch9 61B(1)d is where being "involved" is defined but if you read down the legislation ( https://www.legislation.gov.uk/ukpga...r/9/2021-04-06) a bit to ITEPA 2003 Ch9 61B(3) it says the following:

"(3)A person does not fall within subsection (1)(d) merely by virtue of providing legal or accountancy services in a professional capacity."

To me this states that if BOOX are employed as an Accountant only then the assertion that they are also a MSCP is out the window and then you cannot be a MSC if there is not a MSCP Involved with your business.

Is my argument sensible....what flaws can you see?

[Guy Incognito]

Relying on ITEPA 2003 Ch9 61B(3) won't help. If they decide they are 'involved' it doesn't matter if they are accountants or not.

[jamesbrown]

Is my argument sensible....what flaws can you see?

The words need to be parsed very carefully. It says that a company is not automatically caught because they are using an accountant in a professional capacity.

[jamesbrown]

Appeal window closes after tomorrow

You should appeal. That is your priority now. You can worry about a POA later, but the main advantage of a POA is that it stops any interest accruing.

[stuckWithCK]

I asked DK about helping me with POA amount as I'm not sure how much I should be paying, he is too busy unfortunately. Is there anyone else who is able to assist us with this?