Churchill Knight & Boox clients being investigated as Managed Service Companies

[Viriatus]

Hi All,

I hope someone could help me, after reading this thread didn't see anyone in similar position as me.

I was a Boox client from mid 2015 till June 2019 when I requested and payed them to close my company, I was a consulant in 2015-2016, 2016-2017 tax year period before I went permanent in 2017-2018. However I kep company open just in case perm role didn't pan out at the time, in 2019 June my new company told me I could not be a director in any other company, so I instructed Boox to close my account, paid them in June 2019 for this, In July they confirmed it would take some months for this to happen, after much chasing in September it was confirmed they had submitted closure.

I kept checking CH registry but nothing until October, and in December noticed strike off had been suspended, contacted Boox, email and phone(Someone would call me back, never did) nothing on email till Feb just to confirm, it has been sent to CH for closure but they ignored my point about suspension , I'll skip almost the year of back and forth nonsense till Dec 2020 when they informed me that "It looks like your company closure has been objected to by HMRC due to a potential MSC investigation." and that once it was resolved it would be closed and not to worry. Nothing else for me to do but wait.

Never received a HMRC letter on this, but to this day my company still shows open in CH register, last email from Boox was in August 2021 telling me that "We are hopeful you will go through soon as we have seen others in a similar situation being allowed to proceed to dissolution recently but frustratingly we are not aware of the order in which these dissolutions will take place."

Can I just submit closure for my company with Companies House or do I have to wait for this to be all over?

Thanks
V.

[eek]

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

Or HMRC lose at any stage....

[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?

[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.

[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]

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.

[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)

[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).

[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]

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.