Churchill Knight & Boox clients being investigated as Managed Service Companies

[eek]

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.

The actual amount you are fighting over is sadly not the amount in the initial requested for 2017/18 but also any NI due on that figure (which will be significant because employer NI will also be due) and for other people subsequent years because this appeal is all or nothing.

Win and HMRC can't ask for a penny, lose and HMRC will claim the NI for that year (NI has a 6 rather than 4 year time period for claims) and any subsequent years HMRC decide where identical.

[DealorNoDeal]

The amount CK are asking for is utterly preposterous. These are the sort of extortionate sums we've seen in the past demanded by unscrupulous scam artists.

With circa 1000 clients affected, a few hundred quid each would cover the cost of a 1st tier tribunal.

I would be highly suspicious of their motives for doing this.

[eek]

The amount CK are asking for is utterly preposterous. These are the sort of extortionate sums we've seen in the past demanded by unscrupulous scam artists.

With circa 1000 clients affected, a few hundred quid each would cover the cost of a 1st tier tribunal.

I would be highly suspicious of their motives for doing this.

+1 remember we haven’t seen the letters but those of us who have been around here for a while know what the costs are and how you should structure a fighting fund.

this is in no way a fighting fund - and if you are a CK member I would be speaking to the FSCA to make a complaint today (it won’t do much but would make them aware if they aren’t already of the games CK are playing).

[GregRickshaw]

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?

This is an awful situation we have found ourselves in, and as you say doing everything legitimately. This coming from someone who got themselves involved in something legitimate (at the time) but extremely dodgy this further attack came as a huge shock by changing to do 'the right thing'.

You chose your accountant through FCSA, no dodgy schemes here and this happens. For what it is worth the main purpose of their attack (IMO) is to frighten as many current or potential LTD/PSCs away from being LTDs and using brollies/PAYE. I believe that has worked very well.

As many have pointed out HMRC push the legislation as far as they absolutely can to see where it breaks, they have zero to lose and everything to gain (see above). Will HMRC win? The biggest problem I see has always been the packaged products and the fees, using CK as your accountant to do your VAT, end of Year, even to use their portal for expenses/invoices etc., is not the problem.

As to your situation it won't mean losing your home unless you choose to pay the bill by raising money on the sale of your home. HMRC can't take your home as payment especially if you have under 18s in the house/home. They can take your possessions/extra property etc., but they can't take your home. If you take a second mortgage to pay your bill then your home is at risk of course.

Also remember if it comes to paying the bill get your MP involved get a long TTP you can survive this, without losing your home.

I had come to the thinking I was going to represent myself in court anyway if it got that far.

Gather every single shred/bit of evidence to prove to HMRC you were not an MSC. Every single bit from your business cards to your website, to your employees pay slips to your logos! In the Costello case those companies didn't even know the name of their LTD! Did your contract client force you to become LTD (mind did) originally. Anything and everything gather it up now.

[Mr ASJ]

Hi All, another person affected by all of this mess. I’m not too familiar with all of this legislation but had a question.

If we are liable to pay high amounts of tax and NI that CK are claiming (which is much more than the Notice 80 Determination sent in March by HMRC), would this be offset by corporation tax and other taxes (e.g. if you took dividends to take income over 50k) associated with having a limited company that gave already been paid?

Because if we are deemed to have paid PAYE/NI then we shouldn’t have paid the corporation tax?

[GregRickshaw]

+1 remember we haven’t seen the letters but those of us who have been around here for a while know what the costs are and how you should structure a fighting fund.

this is in no way a fighting fund - and if you are a CK member I would be speaking to the FSCA to make a complaint today (it won’t do much but would make them aware if they aren’t already of the games CK are playing).

+2 this and eek's reply +1

I imagine CK know there are some companies amongst the 1000 plus who are business cash rich, like most fundings I would suspect they hope to get around 20/30% take up which would probably be enough to get to the £1.2 million they need.

The questions I would be asking is why now? No tribunal in sight
Why not independent trust? Not their bank account!

[GregRickshaw]

Hi All, another person affected by all of this mess. I’m not too familiar with all of this legislation but had a question.

If we are liable to pay high amounts of tax and NI that CK are claiming (which is much more than the Notice 80 Determination sent in March by HMRC), would this be offset by corporation tax and other taxes (e.g. if you took dividends to take income over 50k) associated with having a limited company that gave already been paid?

Because if we are deemed to have paid PAYE/NI then we shouldn’t have paid the corporation tax?

Correct however HMRC have not yet confirmed you won't be double taxed due to late conditional claims!

You should also get your Dividend Tax back. CK did release a spreadsheet which gave you the possible final amount based on PAYE determination

[jamesbrown]

Hi All, another person affected by all of this mess. I’m not too familiar with all of this legislation but had a question.

If we are liable to pay high amounts of tax and NI that CK are claiming (which is much more than the Notice 80 Determination sent in March by HMRC), would this be offset by corporation tax and other taxes (e.g. if you took dividends to take income over 50k) associated with having a limited company that gave already been paid?

Because if we are deemed to have paid PAYE/NI then we shouldn’t have paid the corporation tax?

Probably. Strictly speaking, there are time limits on reclaiming overpaid tax, which vary by tax, and they may be exceeded as this plays out, but a tribunal judge can be asked to rule and would probably rule that the taxes paid should offset those owed. There will be interest too, though.

[GregRickshaw]

Probably. Strictly speaking, there are time limits on reclaiming overpaid tax, which vary by tax, and they may be exceeded as this plays out, but a tribunal judge can be asked to rule and would probably rule that the taxes paid should offset those owed. There will be interest too, though.

The current state is... confusion...

Firstly HMRC rejected the conditional claims as they were late. However they (HMRC) sent out the option to claim after the deadline (yip)
Then HMRC agreed the claims (conditional) were valid
Then HMRC said this was not true and the claims were late so invalid.

Apparently the PAYE inspectors know nothing about CT rules/laws and the CT inspectors don't want to get involved in a PAYE inspection.

As always no sod actually knows what is going on.

[Anvipa]

I have seen the announcement yes. Full transparency here I was one of the 73 companies released recently so although I no longer involved as much, that is an outrageous claim and amount from CK. Apparently everyone has also been hit with three years of nothing like what they received as determinations thus arriving at a vastly inflated % to fund the case.

I would think very carefully now about simply letting this play out in court and then representing yourself at a tribunal afterwards if CK lose. The amount of money they are asking for is way over the one million pounds David Kirk and others have estimated to be need, and they (DK and others) factor in amounts for appeals.

We are all innocents here and if CK weren't about to disappear with it seems clients money it would be worth us getting together to sue them.

This is exactly my thought. CK's request to fund the fighting fund smells fishy. And what they are asking to contribute is preposterous (c.£6K on average X1000 contractors= £6m!!!) They are trying to convince us they will be protecting us in court, and this is why we have to subsidize the legal fees. While in fact they will be fighting for themselves, because if they are acknowledged as an MSCP, their business is done (I have a feeling they are already on the way down) They charged obscene fees for what I felt was very poor quality service and now they got us into this mess. I feel we've been mis sold and mistreated. I would certainly join the group if people decide to take legal action against CK