Churchill Knight & Boox clients being investigated as Managed Service Companies

[DealorNoDeal]

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).

So, it might only be a problem if the wife was in business (eg. self-employed) and got paid by the PSC?

I've just been thinking about how far HMRC could contort this MSC stuff.

[Fred Bloggs]

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.

Understood. The fact that these companies and others similar appeared to offer and in fact still offer, different levels of service for different monthly subscriptions would be one thing I would focus on very closely indeed. It would make a lot of sense if lower paying clients were getting less hand holding than higher paying clients. I think it supports your case if you were a lower paying client and can prove the vanilla book keeping service. In my opinion of course.

It's horrible having this hanging over you. I am still convinced there's going to be a line drawn where some clients who had the "completely hands-off solution" will be MSCs and the others won't be. The legislation as written appears to me to support that kind of decision. I still have some faith that justice will prevail and you won't be found an MSC.

[jamesbrown]

So, it might only be a problem if the wife was in business (eg. self-employed) and got paid by the PSC?

I've just been thinking about how far HMRC could contort this MSC stuff.

Unless your partner is running an MSCP, no. Of course, if they are running an MSCP and that MSCP is "involved with" the MSC, then sure. It is vastly unlikely that anyone would involve their partner on those terms, much more likely that they are helping with the bookkeeping for some minimal/justifiable salary, in which case that probably helps, if anything (i.e., if true).

[Guy Incognito]

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.

Same boat for me. c) and d) I can demonstrate a lot of evidence against.

a) I can't make an argument against because the assertion makes no sense. They say a monthly payment is evidence of them benefitting from provision of services of the individual and I say it wasn't. That's it.

[DealorNoDeal]

Unless your partner is running an MSCP, no.

But what is an MSCP? Does it have to be a firm of accountants managing multiple PSCs, or could it be a one-person business (bookkeeper) managing a single PSC?

[jamesbrown]

But what is an MSCP? Does it have to be a firm of accountants managing multiple PSCs, or could it be a one-person business (bookkeeper) managing a single PSC?

It is someone who makes a business out of assisting PSCs (and "involves" themselves with those PSCs). It is not a partner helping with the books. I don't think there is any such thing as a one-person business managing a single PSC, that would be nonsense given the amount of work involved (minimal).

[Guy Incognito]

But what is an MSCP? Does it have to be a firm of accountants managing multiple PSCs, or could it be a one-person business (bookkeeper) managing a single PSC?

If there was an MSCP with only one MCP it would not be cost-effective for HMRC to make the effort to make a determination.

[DealorNoDeal]

I don't think there is any such thing as a one-person business managing a single PSC, that would be nonsense given the amount of work involved (minimal).

No but it might be done for tax reasons, although typically the married partner "doing the books" would be an employee of the PSC rather than a sole trader in business on their own account.

Anyway, it's purely hypothetical and HMRC are unlikely to be interested. They are only interested in MSC if it clobbers thousands of PSCs in one fell swoop, and screws big enablers.

[Guy Incognito]

Another stupid question.

I know it is possible represent yourself at the First Tier Tax Tribunal.

SI/SR Template (judiciary.uk)

Just how foolhardy would this be? Has anyone done it before?

[malvolio]

Another stupid question.

I know it is possible represent yourself at the First Tier Tax Tribunal.

SI/SR Template (judiciary.uk)

Just how foolhardy would this be? Has anyone done it before?

Dunno about foolhardy, but most of the lost cases at FTT in the early days of IR35 started off with people representing themselves...