Churchill Knight & Boox clients being investigated as Managed Service Companies

[Fred Bloggs]

Danbro doing his taxes, payroll and invoice control. He’d better look out as well…

Indeed. I never realised this degree of handholding was still happening. Something has attracted Hector to look more closely and it isn't hard to see what it was that got his attention after CBS.

[jamesbrown]

Indeed. I never realised this degree of handholding was still happening. Something has attracted Hector to look more closely and it isn't hard to see what it was that got his attention after CBS.

Yes, this thread has been absolutely eye opening in that regard.

[Peoplesoft bloke]

Array

Yes, this thread has been absolutely eye opening in that regard.

It doesn't seem all that odd to me - a lot of haulage and airline businesses run with contracted out maintenance. 99% of people there have no idea of the inner workings of an aircraft engine or a tractor unit - they leave that to the experts who provide a commoditised service to support them.

It actually seems more odd to me that so many IT contractors profess themselves to be experts on Taxation and Company law and seem to think spending hours farting about with spreadsheets is an essential part of their job and anyone who doesn't is some sort of reckless incompetent.

The fact is that HMRC and the government could address these issues pretty simply but they choose to preside over a ridiculously complex system because it suits them.

This current debacle is a massive overreach.

[jamesbrown]

It doesn't seem all that odd to me - a lot of haulage and airline businesses run with contracted out maintenance. 99% of people there have no idea of the inner workings of an aircraft engine or a tractor unit - they leave that to the experts who provide a commoditised service to support them.

The analogy doesn’t work because a flight attendant is not responsible for engine maintenance. Company directors are responsible for their statutory duties. As it turns out, a decent fraction of contractors don’t have a clue what they are.

I agree that it’s overreach, but we must also acknowledge the error in judgement of many contractors who believed they could contract out their basic responsibilities. As I noted earlier in this thread, if you cannot understand your basic accounts, you cannot spot people like Darren Upton, quite apart from fulfilling any statutory duties.

[difficulttimes]

Maybe I'm missing something but contractors deciding to leave their accountant and doing their own accounts and only asking their accountants to do their CT returns and YE will still be on HMRC's radar if their accountant is being invested as a MSCP. HMRC won't know if you are paying your accountants monthly, quarterly or doing a direct debit or even using a portal unless the MSCP or Ltd. company Director tells them. What they definitely do know on their system is what accountant is doing your CT return and YE accounts. So if there was an enquiry into said accountant for said year then all they would do is do a filter on that accountancy practice for that year and pull up all the limited companies. I've read a couple of examples here on that. The issue then is that you are still thrown in the mix with everyone else and I see it very unlikely that HMRC will withdraw their Reg. 80 notice on the back of you telling them that you weren't using their portal and using a spreadsheet. I hope I'm wrong. But bottom line this is an incredible over-reach.

[jamesbrown]

Maybe I'm missing something but contractors deciding to leave their accountant and doing their own accounts and only asking their accountants to do their CT returns and YE will still be on HMRC's radar if their accountant is being invested as a MSCP. HMRC won't know if you are paying your accountants monthly, quarterly or doing a direct debit or even using a portal unless the MSCP or Ltd. company Director tells them. What they definitely do know on their system is what accountant is doing your CT return and YE accounts. So if there was an enquiry into said accountant for said year then all they would do is do a filter on that accountancy practice for that year and pull up all the limited companies. I've read a couple of examples here on that. The issue then is that you are still thrown in the mix with everyone else and I see it very unlikely that HMRC will withdraw their Reg. 80 notice on the back of you telling them that you weren't using their portal and using a spreadsheet. I hope I'm wrong. But bottom line this is an incredible over-reach.

I don't think you're missing anything insofar as the only way to eliminate risk is to do the accounts yourself.

However, there is a spectrum here. At one end of the spectrum, you have CBS. At the other end of the spectrum, you have an accountant that reviews the draft year-end returns on an ad-hoc basis. It would be astonishing if the latter were caught, given the carve out for accountants operating in a professional capacity, but that (clause 3) will be tested.

[Fred Bloggs]

I don't think you're missing anything insofar as the only way to eliminate risk is to do the accounts yourself.

However, there is a spectrum here. At one end of the spectrum, you have CBS. At the other end of the spectrum, you have an accountant that reviews the draft year-end returns on an ad-hoc basis. It would be astonishing if the latter were caught, given the carve out for accountants operating in a professional capacity, but that (clause 3) will be tested.

I really don't see how it would be remotely possible to engage a professional to do ad hoc paid for tasks and be an MSC. The very idea is laughable even given Hector's apparent over reach in the present investigation. Every street corner convenience store or newsagent would fall within than net. It's not going to happen.

[cojak]

While not laughable here, I am finding LinkedIn to be a constant source of amusement atm.

[Fred Bloggs]

I really don't see how it would be remotely possible to engage a professional to do ad hoc paid for tasks and be an MSC. The very idea is laughable even given Hector's apparent over reach in the present investigation. Every street corner convenience store or newsagent would fall within than net. It's not going to happen.

Though, given what has come out of this thread, is that looking around at present offerings by SJD, Danbro etc..... I conclude that certain accountants would appear to have blithely ignored the MSC legislation when pitching for business on their websites. So I do now think that to some degree, the evidence suggests the profession in some quarters has brought this on itself.

Sadly, the contractors are carrying the can. As usual. But anyone looking for "a fully hands off accountant solution" as has been advertised has again blithely ignored legislation of which they should have been fully aware.

It's a very sad mess for those who had vanilla accounting support and are caught in the cross fire.

[Fred Bloggs]

While not laughable here, I am finding LinkedIn to be a constant source of amusement atm.

Decapitated chickens?