Churchill Knight & Boox clients being investigated as Managed Service Companies

[hudson]

Why does HMRC push the legislation to the limit and beyond when it comes to the contractor community, why for example arent the bounce back loan fraudsters being targeted with the same level of vehemence? Contractors rarely commit fraud, all the information is sent to HMRC and they have it infront of them. For me the contractor community is a fell-swoop demographic (because of the homogenous nature in which they operate), they are actually dilligent in bookkeeping which allows easy calculation of liability when the legislation is tinkered or enforced to the extremes of its remit or beyond it, generally they are one man bands and do not have the comeraderie or levels of funding to defend themselves. It sound like they look at the amount of effort compared to the return and contractors make for easy pickings in this regard.

[eek]

Why does HMRC push the legislation to the limit and beyond when it comes to the contractor community, why for example arent the bounce back loan fraudsters being targeted with the same level of vehemence? Contractors rarely commit fraud, all the information is sent to HMRC and they have it infront of them. For me the contractor community is a fell-swoop demographic and they are actually dilligent in bookkeeping which allows easy calculation of liability when the legislation is tinkered, generally they are one man bands and not have the comeraderie or levels of funding to defend themselves. It sound like they look at the amount of effort compared to the return and contractors make for easy pickings in this regard.

Yep - the reason why IR35 has returned to the original (circa 2000) plan that end clients are responsible for the determination is because it allows then to ask for all 500 other cases to be regarded as the same
And here the MSC legislation allows HMRC to go after x000 contractors for the same effort as a single IR35 investigation (and it's probably less effort).

[Fred Bloggs]

Why does HMRC push the legislation to the limit and beyond when it comes to the contractor community, why for example arent the bounce back loan fraudsters being targeted with the same level of vehemence? Contractors rarely commit fraud, all the information is sent to HMRC and they have it infront of them. For me the contractor community is a fell-swoop demographic and they are actually dilligent in bookkeeping which allows easy calculation of liability when the legislation is tinkered, generally they are one man bands and not have the comeraderie or levels of funding to defend themselves. It sound like they look at the amount of effort compared to the return and contractors make for easy pickings in this regard.

But nobody here should be in the slightest surprised. It's been over twenty years in the making.

[DealorNoDeal]

But nobody here should be in the slightest surprised. It's been over twenty years in the making.

One day HMRC may crack it.

[Fred Bloggs]

One day HMRC may crack it.

Seems they are a lot closer to a fully PAYE agency workforce than they were even just a couple of years ago.

[I am tired TIRED]

Why does HMRC push the legislation to the limit and beyond when it comes to the contractor community, why for example arent the bounce back loan fraudsters being targeted with the same level of vehemence? Contractors rarely commit fraud, all the information is sent to HMRC and they have it infront of them. For me the contractor community is a fell-swoop demographic (because of the homogenous nature in which they operate), they are actually dilligent in bookkeeping which allows easy calculation of liability when the legislation is tinkered or enforced to the extremes of its remit or beyond it, generally they are one man bands and do not have the comeraderie or levels of funding to defend themselves. It sound like they look at the amount of effort compared to the return and contractors make for easy pickings in this regard.

Spot on. Low hanging fruit we are. Easy pickings.

Human nature I suppose. Same for smugglers, drug dealers and p1mps!
Mr big shot in these 'professions' are usually last in the dock

[Guy Incognito]

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.

I have received conflicting advice regarding whether pension contributions count as 'payment to the individual'.

I believe the relevant legislation is Section 61B of Income Tax (Earnings and Pensions) Act 2003.

61B Meaning of “managed service company”

(b) payments are made (directly or indirectly) to the individual (or associates of the individual) of an amount equal to the greater part or all of the consideration for the provision of the services,


Can you explain your reasons for stating that "pension contributions in the year ... escape retrospective taxation"?

[Guy Incognito]

They made one assertion that sounds wrong to me, namely that the deemed payment calculation is based on salaries/dividends actually paid and not the payments made to the PSC in respect of work performed by the individual. That is not how it works with the IR35 deemed payment (Chapter 8) and I think it's the same for Chapter 9 (MSC), but I will need to double-check. I challenged them via a chat/question, but they didn't answer it.

Please let me know if you get further clarity in this matter. I have been advised it is salary and dividends.

As per my other post I am unclear on the status of Pension Contributions as 'payments to the individual'.

[eek]

Please let me know if you get further clarity in this matter. I have been advised it is salary and dividends.

As per my other post I am unclear on the status of Pension Contributions as 'payments to the individual'.

Irrelevant as we are talking about historic years and you can't back date pension contributions..

[eek]

They made one assertion that sounds wrong to me, namely that the deemed payment calculation is based on salaries/dividends actually paid and not the payments made to the PSC in respect of work performed by the individual. That is not how it works with the IR35 deemed payment (Chapter 8) and I think it's the same for Chapter 9 (MSC), but I will need to double-check. I challenged them via a chat/question, but they didn't answer it.

That sounds right to me - they are explicitly looking at the dividend payments and saying that NI and full income tax should have been paid on those payments.