Churchill Knight & Boox clients being investigated as Managed Service Companies

[GregRickshaw]

Right, (2)(c) and (2)(d) are the most important in relation to CK and Boox, unless the dormant company rate is sufficient for (2)(a) with CK, but I doubt it. Of those, I think (2)(c) is most at risk because there is a line between advice about tax efficient options and default assumptions that need to be explicitly overridden. We shall see. Anyway, the "others" to whom you refer seem to be in the minority from the seminars I have attended so far. I think it was just David Kirk & Co arguing for (2)(a), but I could be wrong.

I'm more confident (personally) around 2 (c) than I am (a) as it just seems (a) is written in stone but hopefully it is as weak as we hope.

I don't suppose much will change in the next six months, a lot of personal appeals and evidence going in but even with optimism WTT and David think 6 months at the very earliest before we see any action. Except for the ones which have been clearly targeted wrongly.

[stuckWithCK]

Except for the ones which have been clearly targeted wrongly.

Could you please elaborate bit more on this point, who has been clearly targeted wrongly?

[eek]

Could you please elaborate bit more on this point, who has been clearly targeted wrongly?

People whose limited companies were closed before 2017 is one example.

Likewise those who can demonstrate that they stopped using CK / Boox before 5th April 2017.

[cojak]

Just a note - can I apologise to people over the last few days. People have been using the acronym 'CK' and I have recently been confusing Churchill Knight with Carnegie Knox in another recent thread.

The two are no way similar.



As you were...

[GregRickshaw]

People whose limited companies were closed before 2017 is one example.

Likewise those who can demonstrate that they stopped using CK / Boox before 5th April 2017.

There were also a few where the end contractor for the work completed/invoiced was not the director of the LTD company
One was also a book-keeping company who had zero end client work

[Fred Bloggs]

Could you please elaborate bit more on this point, who has been clearly targeted wrongly?

I would also think that those who had just basic vanilla book keeping input from Boox or Churchill Knight and can prove it should be making it very clear to HMRC that was the case. I cannot see for the life of me anyone who just used these firms for simple book keeping can be caught by MSC legislation. Hector can want to make every contractor Ltd Co into an MSC, but that isn't how the legislation was enacted. And it doesn't mean Hector is right. Even better if you can prove you never used the custom book keeping portal and you can clearly show you decided on your own what salary, dividends etc were paid by your Ltd Co.

[eek]

I would also think that those who had just basic vanilla book keeping input from Boox or Churchill Knight and can prove it should be making it very clear to HMRC that was the case. I cannot see for the life of me anyone who just used these firms for simple book keeping can be caught by MSC legislation. Hector can want to make every contractor Ltd Co into an MSC, but that isn't how the legislation was enacted. And it doesn't mean Hector is right. Even better if you can prove you never used the custom book keeping portal and you can clearly show you decided on your own what salary, dividends etc were paid by your Ltd Co.

While that isn't how the legislation is enacted it is how the legislation has been interpreted by the courts given the areas covered by the Upper Tribunal and the Court of Appeal.

As for Hector getting every contractor Ltd Co in the position of being an MSC - that seems to be the aim.

[GregRickshaw]

I would also think that those who had just basic vanilla book keeping input from Boox or Churchill Knight and can prove it should be making it very clear to HMRC that was the case. I cannot see for the life of me anyone who just used these firms for simple book keeping can be caught by MSC legislation. Hector can want to make every contractor Ltd Co into an MSC, but that isn't how the legislation was enacted. And it doesn't mean Hector is right. Even better if you can prove you never used the custom book keeping portal and you can clearly show you decided on your own what salary, dividends etc were paid by your Ltd Co.

I can see how most of us with CK can 100% prove they were just a book keeping firm for us (which used technology/portals) with lots of our own evidence and just plain communication between HMRC, ourselves and CK. We can also prove point (d) is just not true, we operated efficiently and without any reliance for payments on any portal. Those of us with DLs or surplus can attest to that.

The advisory payments things stopped with CK (for me) back in 2013 though I have since heard others still got them up to 2015. So we clearly never took advice during 2017/18 as there was no advice on payments.

For me point (c) is utter nonsense always has been and again evidence is very strong. There was never a yearly statement showing how much you would receive over 12 months. Not even in the early days of 2012.

However, I'm not sure how much of CK's drawers HMRC have rifled through so far, apparently the investigation started in 2018 so I would image a lot! Maybe CK do indeed provide MSC just not all of us. The words 'speaking with clients' is the chilling statement.

Like many others we are trying our best and have provided tons of evidence to disprove (c) and (d) but point (a) for me is the one impossible (taking the black and white paper written word) to argue away. As HMRC clearly state it only needs to capture us on one point.

[DealorNoDeal]

As an aside, could this constitute an MSC?

PSC where
Husband supplies the services; receives salary & dividends
Wife is a shareholder; manages the company, does the books, payroll etc. Receives compensation in the form of dividends.

[jamesbrown]

As an aside, could this constitute an MSC?

PSC where
Husband supplies the services; receives salary & dividends
Wife is a shareholder; manages the company, does the books, payroll etc. Receives compensation in the form of dividends.

No, because there is no MSCP in relation to 61B (1)(d), which is part of a collection of "and" sub-clauses, so every one must be true. The wife does not "carry on a business" as laid out in (1)(d). Likewise, if you paid yourself less than the total amount of the consideration due in respect of the services, as in 61B (1)(b).