Churchill Knight & Boox clients being investigated as Managed Service Companies

[DealorNoDeal]

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?

I know a couple of people who have, and the judges were helpful. They didn't let HMRC barristers take advantage.

In a case like this where the question, of whether your company was an MSC or not, hinges on what happened on the ground, I don't think it would necessarily be a massive disadvantage representing yourself. All you would be doing is stating the true facts of the situation.

And when you consider it could cost as much as 6-figures* to use a tax barrister...

* You can't instruct a tax barrister directly, you have to go through a solicitor adding another layer of cost. You could use a tax advisor to represent you, which would cost less, but either way it won't be cheap.

PS. costs are rarely awarded at the FTTT, so even if you win you'll still have to pay for your own representation. In some cases, this could end up being more than the potential tax liability!

[malvolio]

I know a couple of people who have, and the judges were helpful. They didn't let HMRC barristers take advantage.

In a case like this where the question, of whether your company was an MSC or not, hinges on what happened on the ground, I don't think it would necessarily be a massive disadvantage representing yourself. All you would be doing is stating the true facts of the situation.

And when you consider it could cost as much as 6-figures* to use a tax barrister...

* You can't instruct a tax barrister directly, you have to go through a solicitor adding another layer of cost. You could use a tax advisor to represent you, which would cost less, but either way it won't be cheap.

PS. costs are rarely awarded at the FTTT, so even if you win you'll still have to pay for your own representation. In some cases, this could end up being more than the potential tax liability!

That's why you need Tax Investigation Insurance cover from somewhere...

Consider - "I alone decided on my salary package from MyCo", "I alone decided on my salary following advice from a qualified expert", "I asked my accountant which was the best salary package and chose accordingly", "I followed my accountant's advice regarding salary".

All are essentially the same thing, and all are how we actually do things. Which, if any, counters the MSC arguments we've seen so far...? That's why you need representation in such a complicated argument as this.

[DealorNoDeal]

That's why you need Tax Investigation Insurance cover from somewhere...

Hopefully most people have got insurance, although I do wonder if insurers are prepared to defend thousands of clients at individual FTTT hearings.

Even if CK and Boox are found to be MSCPs in a test case, many clients may want their own day in court to argue why their individual circumstances were different and their PSC wasn't an MSC.

[eek]

That's why you need Tax Investigation Insurance cover from somewhere...

Consider - "I alone decided on my salary package from MyCo", "I alone decided on my salary following advice from a qualified expert", "I asked my accountant which was the best salary package and chose accordingly", "I followed my accountant's advice regarding salary".

All are essentially the same thing, and all are how we actually do things. Which, if any, counters the MSC arguments we've seen so far...? That's why you need representation in such a complicated argument as this.

I suspect it's going to end up being something like

"I followed my accountant's advice regarding salary" and manually entered the figures into FreeAgent - decision can be demonstrated to have been done by the director.

"I followed my accountant's advice regarding salary" so used the default values in the portal - that could be a big problem.

As for tax investigation insurance - we can see from the reaction of the providers that MSC wasn't thought about and none of them like the looks of it - IR35 was way easier to deal with in comparison because it was time consuming on HMRC's side.

[DealorNoDeal]

As for tax investigation insurance - we can see from the reaction of the providers that MSC wasn't thought about and none of them like the looks of it - IR35 was way easier to deal with in comparison because it was time consuming on HMRC's side.

Although HMRC may face the same problem if large numbers of people take the view "screw whether CK or Boox were an MSCP, my PSC wasn't an MSC", and demand their own day in court. Of course, this would be a BIG problem for the insurers too.

[eek]

Although HMRC may face the same problem if large numbers of people take the view "screw whether CK or Boox were an MSCP, my PSC wasn't an MSC", and demand their own day in court. Of course, this would be a BIG problem for the insurers too.

My viewpoint is that we need to see how the insurers react to things because the issue was so irrelevant none of the policies seemed to explicitly include or exclude it.

QDOS did the original appeal letters because they really wasn't time to do much else given the pressing deadlines - I don't think we (or even they) know how things will pan out going forward.

[jamesbrown]

I sent my appeal over 2 weeks ago but still haven't had a response from Hector. Have called the number on the letter but it just rings out and goes to voicemail. Just wondered if others have sent their appeals in but still haven't heard anything back? Have received zero updates from Boox on this matter too other than the first 2 emails but expect this case is in for the long haul...

Did you send it recorded delivery, i.e., you have proof it arrived?

[rdw1970]

Did you send it recorded delivery, i.e., you have proof it arrived?

Sorry I should have made it clearer, I sent my appeal via email to the address in the letter - [email protected]

[Hareforthebear]

I sent my appeal over 2 weeks ago but still haven't had a response from Hector. Have called the number on the letter but it just rings out and goes to voicemail. Just wondered if others have sent their appeals in but still haven't heard anything back? Have received zero updates from Boox on this matter too other than the first 2 emails but expect this case is in for the long haul...

That’s ridiculous isn’t it. Give you 30 days to pay a large chunk of tax with little to no detailed justification or calculation provided, yet can’t reply to confirm receipt of your appeal within two weeks.

I have heard from boox they are still trying to resolve this their side with HMRC but that HMRC are being painfully slow.

[rdw1970]

That’s ridiculous isn’t it. Give you 30 days to pay a large chunk of tax with little to no detailed justification or calculation provided, yet can’t reply to confirm receipt of your appeal within two weeks.

I have heard from boox they are still trying to resolve this their side with HMRC but that HMRC are being painfully slow.

Ok thanks, that's the same response I received from Boox after I CC'd them on my appeal.
And yes it is ridiculous and appears they have bitten off more than they can chew.