Churchill Knight & Boox clients being investigated as Managed Service Companies

[SoConfused]

Of course it's massive overreach - however, the CBS case has made it possible due to their focus on low wages relative to dividends - quite often ignoring the far stupider things that CBS also did.

So I can see why HMRC are trying it on because the reality is that HMRC may well win the case.

Win the case based on someone trying to be tax efficient? Cause all other arguments don't stand as CK do nothing like CBS did.

[eek]

Win the case based on someone trying to be tax efficient? Cause all other arguments don't stand as CK do nothing like CBS did.

Go and read the judgments - it's slightly more nuanced than that but only very slightly...

[SoConfused]

Go and read the judgments - it's slightly more nuanced than that but only very slightly...

Read it. This stood out to me "An accountant or other support service will not be caught even if some of its customers are PSCs because although in a broad sense it might be regarded as facilitating those PSCs in the running of their business, that assistance is merely a consequence of the services it provides, it is not in the business of doing that."

[eek]

Read it. This stood out to me "An accountant or other support service will not be caught even if some of its customers are PSCs because although in a broad sense it might be regarded as facilitating those PSCs in the running of their business, that assistance is merely a consequence of the services it provides, it is not in the business of doing that."

Depending on where you copied that from (Google gives me 2 results) the end of the paragraph (in the act) or the following paragraph (in the summary linked to below) is all important. As I seem to have to repeat here nuance is everything and just because 1 line in a paragraph tells you what you want to here the overall context is way more important.

As to whether a particular service provider will be able to draw the distinction between facilitating PSCs as a mere consequence of its business or as the substance of its business, will be an argument for another day in another case.

From Chartergates – Court of Appeal confirms Costelloe is an MSC Provider

because while it is true that an Accountant shouldn't be caught by the act, it's equally true that an MSC provider shouldn't be able to escape the act by claiming to be an accountant

[DealorNoDeal]

So, any firm that specialises in PSCs is at risk? And the safer option is to use an Accountant that services a broad mix of different types of businesses (shops, restaurants etc)?

In which case, the future for contractor specialist accountants (excluding brollies) may not be so rosy.

[Peoplesoft bloke]

Array

So, any firm that specialises in PSCs is at risk? And the safer option is to use an Accountant that services a broad mix of different types of businesses (shops, restaurants etc)?

In which case, the future for contractor specialist accountants (excluding brollies) may not be so rosy.

As I said - I hope the accountancy industry is paying attention.

[eek]

Array

As I said - I hope the accountancy industry is paying attention.

I pointed out above that there is a rapid move from custom portals to using FreeAgent / Xero as a portal.

[tenten]

because while it is true that an Accountant shouldn't be caught by the act, it's equally true that an MSC provider shouldn't be able to escape the act by claiming to be an accountant

I tend to agree with this but its not obvious where the boundaries sit. The accountancy exemption doesn't lend itself to adding clarity:

"A person does not fall within subsection (1)(d) merely by virtue of providing legal or accountancy services in a professional capacity."

Yet the Costelloe ruling surprisingly bluntly says with regards to the wording of the MSCP section of Chapter 9 ITEPA:

"The business that the Government was trying to catch in the definition is precisely the business that Costelloe runs"

So where does "providing accountancy services in a professional capacity" step over the mark into being an MSCP? In the context of Costelloe it seems they were bobbing around providing different permutations of employment-like solutions using really poorly constructed practices for unwitting and naive clients with. So I can see why the ruling has taken that tone. With CK, we can only assume/guess at this stage.

[Peoplesoft bloke]

Array

I pointed out above that there is a rapid move from custom portals to using FreeAgent / Xero as a portal.

That's Ok for the future (if indeed Hector can be persuaded to desist on that basis) but it doesn't address the historical issue which is what we're talking about here.

I haven't seen all these different offerings to compare them (I have seen the portal my accountant offered, and my previous accountant sent me a spreadsheet template) - what's in them that suggests they are a "gotcha" for a provider being an MSC, as opposed to a helpful tool for bookkeeping and calculation of liabilities such as corporation tax and VAT (which is what the spreadsheet did)?

[DealorNoDeal]

I imagine HMRC are viewing the "MSCP angle" as a convenient/efficient way of targeting a very large number of PSCs.

Will switching to an off-the-shelf portal be enough for them to leave the contractor accountants alone in future? I'm not so sure about that, as they no doubt regard these firms as major facilitators of disguised employment.