Churchill Knight & Boox clients being investigated as Managed Service Companies

[eek]

@ Moderator, is it possible to have a separate sticky for MSC legislation to summarise factual information about the legislation itself and what contractors could do to avoid falling foul with real MSCP scheme?

Until the CK case appeared no-one had given thought to the MSC legislation since about 2006 because few people were running MSC schemes (other tax avoidance schemes were way more profitable for the organisers).

So personally I don't see any point - because even CK are going to be very careful going forward and in reality all any accountant needs to do is to use something like Xero or Freeagent for their front end...

[Supergirl007]

It is probably not a bad idea to switch at year end, yes. On the other hand, if you really want to eliminate all risk (of being caught in future years), then you would need to do the books yourself with the aid of FA or Xero or similar, perhaps paying an accountant to review your year-end draft returns (accounts for HMRC and CH and SATR being the major ones). This is not a small leap, though. For example, if you forget something like submitting your annual confirmation statement to CH it can have severe consequences (but then, that is also true now, accountant or no accountant). However, with some reading and good bookkeeping software, it is not that hard.

Thank you. I will definitely be looking to do that. I've been using CK since 2014. I feel like such an idiot. In all the time I have maintained them as my accountant, they have never told me how much to withdraw or not, they do not get my contracts etc. They simply advised me of the VAT I owed when due, did my company accounts, and bookkeeping. I used the portal like I do with my other company however I use Xero and another accountant for that business. Oh dear what a mess. ??♀️

[oleanderwand]

Until the CK case appeared no-one had given thought to the MSC legislation since about 2006 because few people were running MSC schemes (other tax avoidance schemes were way more profitable for the organisers).

So personally I don't see any point [of having sticky] - because even CK are going to be very careful going forward and in reality all any accountant needs to do is to use something like Xero or Freeagent for their front end...

Ok, I understand, thanks Eek.

[jamesbrown]

Thank you. I will definitely be looking to do that. I've been using CK since 2014. I feel like such an idiot. In all the time I have maintained them as my accountant, they have never told me how much to withdraw or not, they do not get my contracts etc. They simply advised me of the VAT I owed when due, did my company accounts, and bookkeeping. I used the portal like I do with my other company however I use Xero and another accountant for that business. Oh dear what a mess. ??♀️

As others have said, if they presented as a vanilla accountant, there's very little you could've done differently and also a (more than) decent chance that CK will win. At the same time, I can see the argument for aggressively reducing (future) risk at this point.

[Hareforthebear]

Have been watching this thread with interest. I am a Boox client so received comms from them yesterday that I should expect a letter from Hector regarding this.

FWIW they are adamant Hector has got it completely wrong and have pledged to aggressively rebut it. Have also stated they have not been provided any technical analysis as to why Hector believes this and that most importantly they have completely ignored the fact that they are an accountancy firm and therefore exempt from the legislation. So am guessing that will be their primary angle here.

I am by no means a legal expert but having read (skimmed) the CBS judgments, it really does seem a huge leap to see Boox as similar to CBS in the services particularly those that fell foul of the tests.

Also, did CBS essentially admit to being an MSCP? And therefore they only had to demonstrate one of the tests previously mentioned as having been met? So, assuming Boox and others are accountantcy firms, that should stop all of this in its tracks right?

From my experience I could not see how the services they have provided me would be outside of what virtually any accountant offers just with different delivery methods perhaps. So if they are not an accountant and therefore exempt, then there must be dozens of firms affected, potentially anyone who provides accountancy services to a PSC? I would love to know how this could fall outside of the definition of an accountant providing services in a professional capacity.

Seems bananas..

[SwissSaffa]

As others have said, if they presented as a vanilla accountant, there's very little you could've done differently and also a (more than) decent chance that CK will win. At the same time, I can see the argument for aggressively reducing (future) risk at this point.

According to Boox, HMRC is not waiting until „they win“ they are sending out letters to all contractors demanding that pay the tax and then if and only if Boox laters „wins“ will HMRC refund the contractors.

[DealorNoDeal]

I guess there could be a problem for CK (financially) if large numbers of people bail out. Although, I see they do run a brolly which shouldn't be affected.

Having been on the receiving end of an HMRC investigation, all you can really do in this situation is hope for the best and plan for the worst.

If it's any consolation, if HMRC do take it forward to litigation, it will run for years. So, it would be a long time before you had to pay anything. If you are concerned about late payment interest accruing (3.25% p.a. from 5th April), you can make payments on account to avoid this.

[DealorNoDeal]

According to Boox, HMRC is not waiting until „they win“ they are sending out letters to all contractors demanding that pay the tax and then if and only if Boox laters „wins“ will HMRC refund the contractors.

That sounds dubious. From what's been posted here, HMRC have issued assessments which can be appealed. They've suggested making payments on account, to avoid interest accruing, but that's not compulsory.

And, they've told one person here that they can't even settle at the moment.

Something doesn't sound right.

[eek]

According to Boox, HMRC is not waiting until „they win“ they are sending out letters to all contractors demanding that pay the tax and then if and only if Boox laters „wins“ will HMRC refund the contractors.

Boox is a different case to CK and from memory were even more blatant in going after customers who wanted a fully hand holding solution....

I can easily see HMRC regarding Boox as a 95% chance of a win, while CK is say a 75% chance of a win...

[SoConfused]

Boox is a different case to CK and from memory were even more blatant in going after customers who wanted a fully hand holding solution....

I can easily see HMRC regarding Boox as a 95% chance of a win, while CK is say a 75% chance of a win...

75% chance of win based on what?