Churchill Knight & Boox clients being investigated as Managed Service Companies

[jamesbrown]

I've recently had chats with an awful lot of tax experts and all of them are of the opinion that both CK and Boox are, sadly, rather screwed...

People should really be paying attention to this. It will probably take 3+ years for these cases to conclude. That is enough time for anyone not with CK or Boox to reconsider and switch to FA, Xero or similar with ad-hoc/end-of-year help, as needed (I wouldn't recommend no help unless you're an experienced contractor because there are probably even more trap doors in doing that).

[eek]

CBS (dodgy IoM scheme) -> CK/Boox is a bit more than "very, very slightly".

CBS ran limited companies for contractors which the contractors knew existed but didn't do much / any of the company's admin work. We saw a very similar example last week in a deleted thread.

The issue with any argument is that the FTT and subsequent tribunals into CBS seriously expanded the remit that was used by focussing on particular points such as salary decisions and what constitutes profiteering that opened up the MCS legislation to a far bigger set of companies.

[Fred Bloggs]

Yip! In my mind there is no doubt they both have been MSCP. The tiers/service levels they introduced long after I joined will be the reason.

This is why I am getting ready to prove I am not one of the MSC.

I have a good case I believe, guilt by association is what I have to throw off and I will.

Incidentally I was recently chatting with a fellow CK client and they did not receive a determination at all, and I have to say they seemed to let CK run a vast majority of their business.

Then, when it comes to it, you point at him/her and tell Hector why that person was an MSC and why you aren't. It's survival of the fittest and nobody is going to look after you like yourself can.

[GregRickshaw]

Then, when it comes to it, you point at him/her and tell Hector why that person was an MSC and why you aren't. It's survival of the fittest and nobody is going to look after you like yourself can.

I hear you but my moral compass will not let me do this. I may hint at consistency but that's as far as I will go.

I am pretty much running on my own now anyway not waiting for the various groups or CK themselves etc.,

[mogga71]

People should really be paying attention to this. It will probably take 3+ years for these cases to conclude. That is enough time for anyone not with CK or Boox to reconsider and switch to FA, Xero or similar with ad-hoc/end-of-year help, as needed (I wouldn't recommend no help unless you're an experienced contractor because there are probably even more trap doors in doing that).

Sounds like a real opportunity for a new online accountant with the slogan of 'Join us at LazyAccountants.com ... we promise to be totally hands-off and do virtually nothing for you and are fully HMRC compliant (for now)'

[eek]

As people may not notice this article I will point it out here Directors, HMRC V Gradidge proves naivety is no excuse if MSC debts get transferred to you (contractoruk.com)

It relates to transfer of MSC debts to a director (who claims to have not even realised he was a director).

[jamesbrown]

As people may not notice this article I will point it out here Directors, HMRC V Gradidge proves naivety is no excuse if MSC debts get transferred to you (contractoruk.com)

It relates to transfer of MSC debts to a director (who claims to have not even realised he was a director).

Interesting, if unsurprising. In summary, ignorance is no defence against a tax liability and the transfer of debt provisions in the MSC legislation are likely to work as expected/intended, resulting in a personal liability to the PSC owner/director in the first instance (or, rather, the second instance, after the MSC itself).

[GregRickshaw]

Interesting...

" Under the MSC legislation the liability hits the MSC (the PSC). It does not fall to the MSCP, and indeed cannot be passed to the MSCP until HMRC is satisfied it cannot be reasonably recovered from the MSC."

CK and Boox on the hook before the director?

[GregRickshaw]

I think you would have to be stone broke before Hector was satisfied they could not recover the debt from you. They can look at and retrieve money from your bank accounts etc and if the debt is ignored and a payment plan isn't agreed with them they can take more drastic measures like using debt recovery agencies. I think reasonably recovered probably means someone doing a Ronnie Biggs and living in a country where the UK doesn't have a Mutual Legal Assistance Treaty so it would prove too costly and time consuming to recover the debt. Just like the Terminator, Hector just won't stop!

I had clarity of the debt transfer until I read that paragraph. You do raise and interesting point though if you are flat broke, ie no money in your accounts and no assets they can't get much can they? So a director renting a property and leasing a car (for instance) pays nothing back?

Maybe you are right and this was my belief, but that says the MSC not the director personally. Those of use who have PoA using funds from the company as it's a company debt, could we possibly have done the wrong thing.

I was clear until I saw that paragraph it sort of reads the way IR35 debt does.

[jamesbrown]

https://www.gov.uk/hmrc-internal-man...manual/esm3625

Note the ordering and the conditions for moving from (1) to (2) or (3). A "transfer" of debt means a transfer from where it falls first, which is the MSC. So, it will go to the director(s) of the MSC first. It's unlikely it won't be recovered at that point.