Churchill Knight & Boox clients being investigated as Managed Service Companies

[malvolio]

Thanks James, I missed the webinar but I am very grateful of your notes and the detailed amount of data you have given us, interesting this though as the letter from HMRC clearly states the debt would not transfer to a partner just because they happened to be married to the MSC director (debtor).

Unless they decide the transfer of assets was done in the knowledge of the impending debt...

[Fred Bloggs]

Thanks James, I missed the webinar but I am very grateful of your notes and the detailed amount of data you have given us, interesting this though as the letter from HMRC clearly states the debt would not transfer to a partner just because they happened to be married to the MSC director (debtor).

However, it is common that a spouse is also a director, share holder and/or company secretary.

[Fred Bloggs]

The way this is shaping up, it's going to be only pension contributions in the year being challenged that escape retrospective taxation. Otherwise, every penny looks like being in Hector's sights.

[jamesbrown]

Thanks James, I missed the webinar but I am very grateful of your notes and the detailed amount of data you have given us, interesting this though as the letter from HMRC clearly states the debt would not transfer to a partner just because they happened to be married to the MSC director (debtor).

Sure, no problem. To be fair, WTT didn't state this, they provided a rather matter-of-fact description of the debt transfer rules and there extremely wide reach (according to them, the most comprehensive and far-reaching anywhere on the statute book). The "waste of time" comment is my interpretation, but I stand by it. If your partner knew why these assets were being transferred, and perhaps even if they didn't, it is very remotely likely that the transfer would work.

[jamesbrown]

The way this is shaping up, it's going to be only pension contributions in the year being challenged that escape retrospective taxation. Otherwise, every penny looks like being in Hector's sights.

Right. But on the upside, HMRC's case looks really quite weak at this stage, even after factoring in some of the terrible marketing from CK and Boox and even after factoring in the dormant company rate at CK, which has a commercial reason. As WTT noted, HMRC have a complete blind spot for commercial decisions, but they are real/applicable.

[jamesbrown]

Boox agreed to do the appeal on our behalf.

I'm not sure that is the best idea. Having the company accused of being an MSCP manage this whole process for you...

Also, any kind of cookie cutter response that doesn't engage with your particular circumstances and the relevant legislation/HMRC handbooks (that are public ) is very unlikely to get resolved quickly; it will just go on the pile to be investigated in detail. That said, all appeals may end up on that pile, but you have zero chance of early closure with a bland appeal that doesn't engage with the facts as they relate to your company.

Of course, the absolutely imperative thing is to get the appeal letter in on time and request that the tax/NI is postponed pending the outcome, more so than what it contains and who sends it. Still.

[Fred Bloggs]

Right. But on the upside, HMRC's case looks really quite weak at this stage, even after factoring in some of the terrible marketing from CK and Boox and even after factoring in the dormant company rate at CK, which has a commercial reason. As WTT noted, HMRC have a complete blind spot for commercial decisions, but they are real/applicable.

Indeed. As I said pages back, anyone with a real, truly vanilla accounting relationship shouldn't be overly worried. That might come back to bite me in time. Irrespective, the stress and upset being brought on who I believe will ultimately not be MSC caught is terrible.

[GregRickshaw]

I'm not sure that is the best idea. Having the company accused of being an MSCP manage this whole process for you...

Also, any kind of cookie cutter response that doesn't engage with your particular circumstances and the relevant legislation/HMRC handbooks (that are public ) is very unlikely to get resolved quickly; it will just go on the pile to be investigated in detail. That said, all appeals may end up on that pile, but you have zero chance of early closure with a bland appeal that doesn't engage with the facts as they relate to your company.

Of course, the absolutely imperative thing is to get the appeal letter in on time and request that the tax/NI is postponed pending the outcome, more so than what it contains and who sends it. Still.

Totally agree with James, that is the worst idea right now. CK explained clearly to us why they cannot represent us anywhere, other than an appeal template to challenge the ruling, they explained if they did help out with those things that could easily be seen as 'involved.

[GregRickshaw]

The way this is shaping up, it's going to be only pension contributions in the year being challenged that escape retrospective taxation. Otherwise, every penny looks like being in Hector's sights.

You can bet they are eyeing up any tax avoidance of any sort.

[GregRickshaw]

However, it is common that a spouse is also a director, share holder and/or company secretary.

Yes in those cases.