Churchill Knight & Boox clients being investigated as Managed Service Companies

[jamesbrown]

I think this must be salary + dividends in which case I can't use this exemption

Yes, it would certainly include all payments made to the individual. I don't think the numerator is in question here, rather the denominator or what it's being divided by, which I assume is the amount invoiced, before any VAT (where applicable).

Anyone who meets this exemption was most likely paying themselves a salary and dividends of ~£43k (or whatever the higher rate threshold was in 17/18) and invoicing around £100k+VAT or above.

[rdw1970]

I personally think this is one the areas where the battle will be won or lost (that and the fees!)

An accountant are probably well within their professional capacity to give you guidance financially on tax efficient methods probably.... Them asking you to set your targets and then advise you how much to pay dependent on the targets is to be argued.

The experts seem to agree that can be argued. What is going to be tricky is the whole packaged product and the fee, the hands off approach I have seen the YouTube video of Boox's portal and it is fairly damning, to the experts and courts it may not be.

I was aware of MSC legislation but never in a 1000 lifetimes did I think it would apply to me, as it turns out it didn't for 17/18 so far anyway, but they still sent me the determinations.

It's going to be a very tough battle no matter what we think.

Yep it's those blasted fees that are going to be the main problem.

Interesting, that Boox has shut down its YouTube, LinkedIn and Twitter accounts now and they are marked as permanently closed on google! Also, the original company Boox has an active proposal to strike off. The app accounting group is still trading though, wonder if there is any significance to this?

[GregRickshaw]

Yep it's those blasted fees that are going to be the main problem.

Interesting, that Boox has shut down its YouTube, LinkedIn and Twitter accounts now and they are marked as permanently closed on google! Also, the original company Boox has an active proposal to strike off. The app accounting group is still trading though, wonder if there is any significance to this?

Oh wow really. I guess to hid damning evidence.

Maybe they couldn't take the amount of clients leaving. Even if they fold their directors are still liable to debt transfer should some of the companies not be able to pay the debt (and those directors have vanished or died etc,). CK and Boox do have their necks on the line a bit.

The original company is that the one who is accused?

[rdw1970]

Oh wow really. I guess to hid damning evidence.

Maybe they couldn't take the amount of clients leaving. Even if they fold their directors are still liable to debt transfer should some of the companies not be able to pay the debt (and those directors have vanished or died etc,). CK and Boox do have their necks on the line a bit.

The original company is that the one who is accused?

the determination letter said BOOX\The App Accounting Group. Looks like the former hasn't traded since 2015. I wonder if they will drop the Boox name now and try to rebrand as there are websites for both companies.

[coxy]

Does anyone know what Boox or CK fee structure was for a limited company, did it ever change related to invoices amounts or quantity?

[eek]

Does anyone know what Boox or CK fee structure was for a limited company, did it ever change related to invoices amounts or quantity?

Not significantly except for I think a discount when it wasn’t invoicing..

worth saying that the end game I think HMRC is looking for isn’t a discount but free use of an umbrella because your company is paying a fee.

[rdw1970]

Does anyone know what Boox or CK fee structure was for a limited company, did it ever change related to invoices amounts or quantity?

No i think it was a set monthly fee but as it was a contract you paid it regardless of whether you were working or not. I think (but can't confirm) there was a fee if your company was dormant too. This is what HMRC says meets one of their 5 tests to determine if a company is an MSCP -benefiting financially on an ongoing basis from the provision of the services of the individual who provides those services through an MSC.

[coxy]

Not significantly except for I think a discount when it wasn’t invoicing..

worth saying that the end game I think HMRC is looking for isn’t a discount but free use of an umbrella because your company is paying a fee.

I’d argue the end game would be related to the discount, as the accountant would effectively be making more money when the contractor is invoicing. Offering free umbrella while still charging you a fee to be your limited company accountant and do the appropriate returns you’ve instructed them to do would be less indicative of an MSCP surely.

[eek]

I’d argue the end game would be related to the discount, as the accountant would effectively be making more money when the contractor is invoicing. Offering free umbrella while still charging you a fee to be your limited company accountant and do the appropriate returns you’ve instructed them to do would be less indicative of an MSCP surely.

I’m not so much thinking about what happens in this case but the end point that HMRC wishes to get to after this set of cases and subsequent ones.

remember that the MSC legislation was designed to target people using limited companies to minimise the tax they pay. An accountant switching you between a limited company and a payroll provider as contracts changed is coming VERY close to that purpose.

[Fred Bloggs]

I’m not so much thinking about what happens in this case but the end point that HMRC wishes to get to after this set of cases and subsequent ones.

remember that the MSC legislation was designed to target people using limited companies to minimise the tax they pay. An accountant switching you between a limited company and a payroll provider as contracts changed is coming VERY close to that purpose.

It's the ONLY purpose?