Churchill Knight & Boox clients being investigated as Managed Service Companies

[Supergirl007]

Whatever you do, don't speak to anyone yourself at HMRC. If you say anything like you said before, you're going to irretrievably incriminate yourself as an MSC. By all means get professional advice and let them do the talking.

Thank you for the heads up. Greatly appreciated.

[Guy Incognito]

Regardless of the real situation I suggest you respond with "Sorry I am completely broke. As I understand there are provisions for transfer of debt, I suggest you defend yourselves."

[southblue]

As an update,
Found a copy of regulation demand from HMRC and it is for the amount I agreed to appeal against.

the apparent 10% of this CKA are asking for is obviously wrong by a long way.

I will call them tomorrow (annoying they sent me the email after office closing time) and see what they say.
However, I fear I will take some convincing that they are the most capable agents to facilitate an appeal now.

[bnacontractor]

I’m really struggling with getting the letter from HEMC this week and then todays begging email from Churchill Knight. It seems unreal that this can happen. You employ an accountant in good faith, do everything legitimately and then this can happen. For me it will mean losing my home. I struggled through covid and just survived financially and now this. Has anyone had independent advice and can I be made to sell my house if it’s all I have to pay the HRMC bill?

[nekro]

Makes sense. I'm not sure people fully appreciate this exclusion from the MSC legislation (Chapter 9). If you weren't extracting more than 50% of the company income, it cannot apply (61B (1) (b)). Of course, IR35 still applies (Chapter 10/11), but that is a separate question.

Is that gross turnover or net turnover (turnover - CT)? I do remember this being mentioned by DK and WTT but only very briefly. I signed up with WTT and they didn't ask any further questions about this.

[kevmc2003]

I’m really struggling with getting the letter from HEMC this week and then todays begging email from Churchill Knight. It seems unreal that this can happen. You employ an accountant in good faith, do everything legitimately and then this can happen. For me it will mean losing my home. I struggled through covid and just survived financially and now this. Has anyone had independent advice and can I be made to sell my house if it’s all I have to pay the HRMC bill?

I'm thinking of contacting HMRC to ask what the situation would be in the terms of payment if the appeal fails. It will be important for us all to understand if we can pay over a period of 1, 2 or 5 years and whether there would be different time scales associated with 17/18 vs 18/19 and 19/20

[jamesbrown]

Is that gross turnover or net turnover (turnover - CT)? I do remember this being mentioned by DK and WTT but only very briefly. I signed up with WTT and they didn't ask any further questions about this.

61B Meaning of “managed service company”


(1)A company is a “managed service company” if—

(a).....

(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,

.....

I would interpret "consideration" as the amount charged to the client, excluding any VAT (if applicable). I could be wrong. These payments could be made as some combination of salary and dividends, for example.

[jt1]

Hi Greg, glad to hear that although not yet official, it looks like you could be out of this horrible mess.

Seems to me that HMRC will delay anything official for as long as possible especially to maximise uncertainty and give minimal clues to others. They’re empathetic people right?!

Quick question- when you say below that your company has been inactive since late 2019, does that mean currently dormant or is it closed / struck off?

They haven't explained why as yet.

I didn't fit into the 50% or less though. I am awaiting the official you are off the hook and why. Not sure it will ever come.

I had three employees (4 with me) during the 17/18 year and two (3 with me) in 18/19. I was on my own in 19/20 and to be clear they have only removed us from the first determination (as I understand) I highly doubt the 18/19 will be sent though, I may yet get 19/20 determination. My company has been inactive since late 2019.

[Chevalier]

As an update,
Found a copy of regulation demand from HMRC and it is for the amount I agreed to appeal against.

the apparent 10% of this CKA are asking for is obviously wrong by a long way.

I will call them tomorrow (annoying they sent me the email after office closing time) and see what they say.
However, I fear I will take some convincing that they are the most capable agents to facilitate an appeal now.

It may be because you haven’t factored in the NI demands?

Either way, I think CK have probably hit the self destruct button!

[eek]

I'm thinking of contacting HMRC to ask what the situation would be in the terms of payment if the appeal fails. It will be important for us all to understand if we can pay over a period of 1, 2 or 5 years and whether there would be different time scales associated with 17/18 vs 18/19 and 19/20

I’m really struggling with getting the letter from HEMC this week and then todays begging email from Churchill Knight. It seems unreal that this can happen. You employ an accountant in good faith, do everything legitimately and then this can happen. For me it will mean losing my home. I struggled through covid and just survived financially and now this. Has anyone had independent advice and can I be made to sell my house if it’s all I have to pay the HRMC bill?

In both your cases go and speak to WTT and see what Graham or Thomas suggest.

As an update,
Found a copy of regulation demand from HMRC and it is for the amount I agreed to appeal against.

the apparent 10% of this CKA are asking for is obviously wrong by a long way.

I will call them tomorrow (annoying they sent me the email after office closing time) and see what they say.
However, I fear I will take some convincing that they are the most capable agents to facilitate an appeal now.

CK were never appropriate people to handle the case but there is strength in numbers as the total cost of all appeals will be £1m and probably £200,000 or so for the first tribunal stage.

Hence you do need a group fund to pay for things but CK clearly aren't the appropriate people given how they are handling this.