Churchill Knight & Boox clients being investigated as Managed Service Companies

[Fred Bloggs]

There's really nothing much wrong with the MSC legislation. It was very much required when it came in. Some of us will remember the most prominent composite company provider in particular, whose publicity effectively was a pi55 take of HMRC. Kind of like "come and get us, if you can".

The only surprise to me was it took so long for Hector to bring this action. Especially when you look at some of the deadful marketing tactics some of the contractor sausage machine accountants have been using.

I still think those who had a vanilla book keeping service will be exonerated at the end of this.

[GregRickshaw]

I still think those who had a vanilla book keeping service will be exonerated at the end of this.

We face a huge fight though when the P in MSCP are found guilty. Which I fully expect they will be.

[Fred Bloggs]

We face a huge fight though when the P in MSCP are found guilty. Which I fully expect they will be.

We're going to have to wait and see. Obviously. In my opinion, the most likely outcome is that those who had the hand holding beyond book keeping are definitely at risk. And those who can prove they didn't will be fine. I can't believe 100% of contractor companies with CK or Boox will be caught. But absolutely, some might be.

[cojak]

As I said in my MSC post, HMRC seem to be using this and the outside/inside IR35 fee-payer legislation in a pincer movement to force all contractors into inside IR35 contracts.

From HMRC’s pov, it’s so much cheaper and cost-effective to go after many contractors' customers (fee-payers) or suppliers (accountants) than it is to go after single contractors.

[DealorNoDeal]

From HMRC’s pov, it’s so much cheaper and cost-effective to go after many contractors' customers (fee-payers) or suppliers (accountants) than it is to go after single contractors.

And, from HMRC's pov, it's a win whatever happens.

If, in say 5 years time, CK, Boox and their clients are fully exhonerated, HMRC will still have disrupted the PSC market, created tons of FUD etc.

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I don't know if it's a good comparison but this reminds me a bit of the Arctic Systems case back in the day. That was another case of overreach. HMRC ultimately lost the protracted legal battle but it created loads of FUD which would have suited them.

[eek]

We're going to have to wait and see. Obviously. In my opinion, the most likely outcome is that those who had the hand holding beyond book keeping are definitely at risk. And those who can prove they didn't will be fine. I can't believe 100% of contractor companies with CK or Boox will be caught. But absolutely, some might be.

Problem is I don’t think that is how the MSC legislation works.

if the Provider is found to be running an MSC operation than I think, sadly, it’s guilt by association.

[Fred Bloggs]

Problem is I don’t think that is how the MSC legislation works.

if the Provider is found to be running an MSC operation than I think, sadly, it’s guilt by association.

Yes, I see that. I don't actually know the detailed legal standing here. Who does? Though I do understand that in cases of guilt by association, an individual has the right to have his/her case heard individually. Where an individual has absolute and clear proof of a simple book keeping relationship, they are quite clearly not an MSC. The legislation as written says so.
Otherwise, hairdressers, plasterers, self employed mechanics, gardeners etc would all be MSC as well if they happened to pay monthly for accountants. It isn't going to happen.

[DealorNoDeal]

Problem is I don’t think that is how the MSC legislation works.

if the Provider is found to be running an MSC operation than I think, sadly, it’s guilt by association.

The only way CK or Boox can be found to be MSCPs, is if the courts find one or more of the 5 test case PSCs are MSCs.

Unfortunately, the legal process is probably going to take years to conclude.

[Hareforthebear]

if the courts find one or more of the 5 test case PSCs are MSCs.

Right, and I’m guessing HMRC are hoping that were this to happen, all those with notices would just pay up, rather than all individually go to tribunal.

[eek]

Yes, I see that. I don't actually know the detailed legal standing here. Who does? Though I do understand that in cases of guilt by association, an individual has the right to have his/her case heard individually. Where an individual has absolute and clear proof of a simple book keeping relationship, they are quite clearly not an MSC. The legislation as written says so.
Otherwise, hairdressers, plasterers, self employed mechanics, gardeners etc would all be MSC as well if they happened to pay monthly for accountants. It isn't going to happen.

Quick question - Are there any first tribunals for companies that used CBS outside of the initial tribunal and subsequent appeals?

If there was the chance of a appeal on your individual situation then given the figures involved I would expect there to be a few other cases yet I've never seen any?

Which means that I think that the 5 test cases are very important and at least one of them will need to win.