Churchill Knight & Boox clients being investigated as Managed Service Companies

[Protagoras]

Will this not present issues with double taxation on the same 'income' with the pension contributions also being subject to tax when they are eventually paid out?

True, employer pension contributions are currently allowed tax-free at the point of contribution.

But there's no general presumption against 'double taxation'.

VAT, Fuel Duty, Council Tax, etc are all paid out of post-tax income (excepting for those who receive income below the personal allowance level)

[jamesbrown]

Will this not present issues with double taxation on the same 'income' with the pension contributions also being subject to tax when they are eventually paid out?

My read is that pensions would not be part of the DEP calculation, just like retained profits, but might be part of the calculation for the qualifying conditions, 61(B)(1)(b). At least, to my mind, the legislation is clear that retained profits are not part of the DEP calculation, even though commentators disagree on this too. Anyway, these details will probably need to be argued at tribunal.

[woody1]

My read is that pensions would not be part of the DEP calculation, just like retained profits, but might be part of the calculation for the qualifying conditions, 61(B)(1)(b). At least, to my mind, the legislation is clear that retained profits are not part of the DEP calculation, even though commentators disagree on this too. Anyway, these details will probably need to be argued at tribunal.

I assume thus far HMRC haven't stated their position on all the "details". Maybe they haven't even thought about some of them, or decided. Until they do, though, nobody knows what they'll even be arguing about. This has all the ingredients of turning into a right mess.

[jamesbrown]

I assume thus far HMRC haven't stated their position on all the "details". Maybe they haven't even thought about some of them, or decided. Until they do, though, nobody knows what they'll even be arguing about. This has all the ingredients of turning into a right mess.

HMRC's position in these matters is invariably maximal (witness IR35, for example, where tribunal judgements have flagged refunds of CT already paid as being disputed by HMRC), although others can confirm whether their Reg 80 determinations appear to be based on the total turnover of the MSC or some other fairy story (as far as they can decipher them).

[Bruce88]

My read is that pensions would not be part of the DEP calculation, just like retained profits, but might be part of the calculation for the qualifying conditions, 61(B)(1)(b). At least, to my mind, the legislation is clear that retained profits are not part of the DEP calculation, even though commentators disagree on this too. Anyway, these details will probably need to be argued at tribunal.

HMRC confirmed this in my last correspondence with them. They consider employer pension contributions as part of 61(B)(1)(b) but not part of DEP, as they are not 'general earnings from employment' as per 61F(2)

[Guy Incognito]

HMRC confirmed this in my last correspondence with them. They consider employer pension contributions as part of 61(B)(1)(b) but not part of DEP, as they are not 'general earnings from employment' as per 61F(2)

That is somewhat reassuring.

[GregRickshaw]

August 14th deadline for CK clients to be chosen. Expect cases to go to tribunal early 2025 optimistically. Hell of a lot of ££££ interest building up for many I suspect.

However, Boox clients apparently are at a much more advanced stage probably because HMRC is more confident there (speculation of course).

No matter how well organised CK and their lawyers are the Boox cases could make the CK cases much more difficult (or plain simple).

And of course, no matter who wins the appeals will drag on for another two to three years.

As always everything is on HMRC's side.

[Guy Incognito]

I literally just received my breakdown of the calculation, just over 15 months after I requested it. I might add with the salutation "Dear Sir or Madam".

I'm terrified how the Boox cases will go, as there is no central co-ordination.

[Fred Bloggs]

August 14th deadline for CK clients to be chosen. Expect cases to go to tribunal early 2025 optimistically. Hell of a lot of ££££ interest building up for many I suspect.

However, Boox clients apparently are at a much more advanced stage probably because HMRC is more confident there (speculation of course).

No matter how well organised CK and their lawyers are the Boox cases could make the CK cases much more difficult (or plain simple).

And of course, no matter who wins the appeals will drag on for another two to three years.

As always everything is on HMRC's side.

Only if someone has deep pockets and agrees to pay big legal bills?

[eek]

Only if someone has deep pockets and agrees to pay big legal bills?

Or HMRC lose at any stage....