Churchill Knight & Boox clients being investigated as Managed Service Companies

[mogga71]

Surely this in itself is going to destroy both CK and Boox in terms of attracting new clients?

Also, will HMRC wait to see how this goes before sending out letters to contractors who used the likes of SDJ etc. Their Essentials package (120 a month) still headlines ... including FreeAgent software (is FreeAgent supposed to be safe and not cause for concern?). Presumably, even if you didn't use that particular package (and it was deemed a reason for it being a MSCP) you will still be in trouble as it's SDJ themselves who will have been identified as a MSCP and you dealt with them? Surely it won't go down to proving which services you actually used with them?

Basically, if your accountant uses an online portal you could be in trouble?

[eek]

Surely this in itself is going to destroy both CK and Boox in terms of attracting new clients?

Also, will HMRC wait to see how this goes before sending out letters to contractors who used the likes of SDJ etc. Their Essentials package (120 a month) still headlines ... including FreeAgent software (is FreeAgent supposed to be safe and not cause for concern?). Presumably, even if you didn't use that particular package (and it was deemed a reason for it being a MSCP) you will still be in trouble as it's SDJ themselves who will have been identified as a MSCP and you dealt with them? Surely it won't go down to proving which services you actually used with them?

Basically, if your accountant uses an online portal you could be in trouble?

FreeAgent == Sage == Xero and is in reality just a tool, so by itself it's not an issue...

If you want to be safe my advice would be to keep everything separate and just pay an accountant a one off fee to do your end of year accounts.

[mogga71]

FreeAgent == Sage == Xero and is in reality just a tool, so by itself it's not an issue...

If you want to be safe my advice would be to keep everything separate and just pay an accountant a one off fee to do your end of year accounts.

Thanks eek. I think you are correct. Jeez ... so yet another way for HMRC to 'encourage' contractors to take the safe 'PAYE' only route whereby you don't actually need an accountant ...who may be dodgy anyway. Times get sadder by the day. Luckily, i am not (yet) caught up in this mess, but if I were I would be absolutely livid.

[GregRickshaw]

Thanks eek. I think you are correct. Jeez ... so yet another way for HMRC to 'encourage' contractors to take the safe 'PAYE' only route whereby you don't actually need an accountant ...who may be dodgy anyway. Times get sadder by the day. Luckily, i am not (yet) caught up in this mess, but if I were I would be absolutely livid.

It's what it has always been about. Shots fired = run for cover.

[GregRickshaw]

Surely this in itself is going to destroy both CK and Boox in terms of attracting new clients?

Also, will HMRC wait to see how this goes before sending out letters to contractors who used the likes of SDJ etc. Their Essentials package (120 a month) still headlines ... including FreeAgent software (is FreeAgent supposed to be safe and not cause for concern?). Presumably, even if you didn't use that particular package (and it was deemed a reason for it being a MSCP) you will still be in trouble as it's SDJ themselves who will have been identified as a MSCP and you dealt with them? Surely it won't go down to proving which services you actually used with them?

Basically, if your accountant uses an online portal you could be in trouble?

There are two things in flight really now. CK and Boox are going to try to prove they were not MCSP (not sure how they can when the monthly fee is enough for HMRC to capture them).

The second thing is more personal, and yes I think it will get down to proving which services you used, most of us have produced tons of evidence to hopefully show HMRC we were definitely not a MSC. However most of us used the portal for something at some point.

The portal is indeed the focus of this operation.

The longer this goes on and boy will go on for a looooong time, the more I am convinced HMRC will win.

I paid the original amount on account and basically wrote it off.

[mogga71]

There are two things in flight really now. CK and Boox are going to try to prove they were not MCSP (not sure how they can when the monthly fee is enough for HMRC to capture them).

The second thing is more personal, and yes I think it will get down to proving which services you used, most of us have produced tons of evidence to hopefully show HMRC we were definitely not a MSC. However most of us used the portal for something at some point.

The portal is indeed the focus of this operation.

The longer this goes on and boy will go on for a looooong time, the more I am convinced HMRC will win.

I paid the original amount on account and basically wrote it off.

Yes this is seriously bad news for both accountants and contractors. Do contractors now abandon their accountants if they have an online portal and just switch to a good old-fashioned high street shop accountant? I am sure many will be thinking that if this ensuing legal mess goes on for say 3 years and HMRC eventually win then HMRC will then start targetting other online accountant contractors and immediately go back the full 4 years.

[jamesbrown]

I paid the original amount on account and basically wrote it off.

Are you really going to do that for the next N years though, plus when the NI demands come through? There is nothing wrong with making the payments on account if you have the money, I suppose, but the recent demands are just the tip of the iceberg - these will end up being much larger amounts. Also, unless you've left CK/Boox, the risk is ongoing.

[eek]

Yes this is seriously bad news for both accountants and contractors. Do contractors now abandon their accountants if they have an online portal and just switch to a good old-fashioned high street shop accountant? I am sure many will be thinking that if this ensuing legal mess goes on for say 3 years and HMRC eventually win then HMRC will then start targetting other online accountant contractors and immediately go back the full 4 years.

As I said above were it me I wouldn't be paying a monthly fee - it would be a fee per service used, which for me would be annual accounts alone.

The issue we probably all have is that FreeAgent is a nicer package than Sage which most accountants use because FreeAgent is customised for the work we do and the way we work.

[Bodger]

As I said above were it me I wouldn't be paying a monthly fee - it would be a fee per service used, which for me would be annual accounts alone.

The issue we probably all have is that FreeAgent is a nicer package than Sage which most accountants use because FreeAgent is customised for the work we do and the way we work.

I'm a little late to the party here, and despite reading the many pages on this thread, I'm still lost as to what the issue is paying an accountant monthly.

Why does it matter to HMRC how I pay my accountant? I pay them monthly so they are there for me to ask professional advice when needed, to prepare my VAT, RTI submissions, accounts etc.

I don't really understand where they are going with this? How can a tax authority tell businesses how they conduct their business? Seems ludicrous.

[praxeologist]

I'm a little late to the party here, and despite reading the many pages on this thread, I'm still lost as to what the issue is paying an accountant monthly.

Why does it matter to HMRC how I pay my accountant? I pay them monthly so they are there for me to ask professional advice when needed, to prepare my VAT, RTI submissions, accounts etc.

I don't really understand where they are going with this? How can a tax authority tell businesses how they conduct their business? Seems ludicrous.

What can I tell you? It's mental asylum grade stuff. Having your employee give you tax advice and file your company's VAT or make payments while you pay them monthly salary is fine but outsourcing such specialist and often mundane tasks to a specialist company is not. You see, it means you're not in control. But guess what? You're still responsible for everything your company does or does not do and HMRC will not let you off the hook for your late VAT, corp tax, reporting etc if the accountant that apparently controls your company which renders you their employee messes it up. Don't you just love it? Kind of like being inside IR35 means no employment rights but employment taxes.