Churchill Knight & Boox clients being investigated as Managed Service Companies

[GregRickshaw]

At the moment, this is the best that we can advise Andrew - we have no more information than you see in this thread.

If you have sent your standard response this is good but better as cojak says to include as much evidence as you can.

If you (like me) have already appealed using CK's basic template etc., HMRC will accept supplement evidence to your early appeal.

Up to you though how you do this. I have listened to WTT and was very impressed, I have my own previously used Tax specialists too who are very good. The word out there is keep pushing HMRC on your own as much and often as you can. There is no need to wait years for a tribunal which actually may hinder you if CK are found to be guilty of being a MSCP

[neneh]

In HMRC's assessment, do they include any penalty charges and interest? How do they calculate the total liability? i am hoping they will not just take contract rates x tax rate. How about expenses?

[frz78]

elsewhere Carolyn Walsh has posted what might be a get out here - one that would throw the blame (and tax) at the agency via TAAR rather than your company.
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It boils down to the reason why you created your limited company:-

1) if it was for limited liability reasons the reason isn't tax avoidance.
2) if it was for tax saving reasons at the recommendation of your accountant - than the accountant (and you) have the MSC problem
3) if it was because the agency only worked with limited companies its possible the blame is with the agency not you - you only created the company because the agency insisted on it.

Now I'm not 100% sure about Carolyn (because there are posts I would disagree with) but it's worth thinking about the above as you work out how to appeal and possibly throw point 3 in rather than point 1...

thanks for sharing this - tbh every single client i have has insisted i was setup as Ltd - hence why is set it up that way in 2011... thats pretty much standard in my sector.

[headband42]

Hello, I have been lurking for a few weeks. I have sent off an appeal to HMRC, received confirmation of that appeal and am currently waiting to see if my contract insurance will cover me for the appeal process / tax investigation.
I have not paid the tax yet. I am convinced the amount is incorrect and am not really sure how to proceed or where to get advice at this stage.

[frz78]

correct me if i am wrong - does this not start to stray in the very territory we are discussing?

[cojak]

correct me if i am wrong - does this not start to stray in the very territory we are discussing?

It might be - This is a FreeAgent 'add-on' and since FA are offering a free trial, I expect is going to cost extra.

I would say 'no thanks' to this until I was confident that it was ok to use.

[eek]

correct me if i am wrong - does this not start to stray in the very territory we are discussing?

No, it's not day to day management of the business - it's very clear that the accountant doesn't generate the invoices...

Edit to add - they also are explicitly not mentioning salary but they will prepare and file payroll (don't worth it as it is a 30 second job on FreeAgent if you remember your HMRC passwords). And the bit that HMRC is going after isn't running payroll it's setting the level of salary versus dividends.

Here all the accountant is doing is running payroll and advice on paying dividends so the control sits with the director.

[frz78]

i guess this underlies the point about the marketplace and regulation - essentially customers being led into dangerous ground. Echoes of the cladding situation..... i have heard people saying on here FA is the way to go... its a total minefield.

[cojak]

I'll bow eek's greater knowledge on this.

[frz78]

No, it's not day to day management of the business - it's very clear that the accountant doesn't generate the invoices...

i would definitey say there is overlap on areas here which have been discussed - not just one thing about invoices....