Churchill Knight & Boox clients being investigated as Managed Service Companies

[pete1987]

So, I've spent today trying to work out a rough calculation of what I could potentially owe. I've formatted two routes which actually bottom out to the same figure (which I am leaning on it being the figure I will need to pay if found 'guilty'.

Option 01 – Apply NI and PAYE tax on the combined salary/dividends figure and treat it as a salary so deductions will be at the going rate (depending on which year) and then deducted the DT I've already paid which gives me a total of £35K

Option 02 – Apply NI and PAYE tax on the company turnover then deducted the CP and DT I have already paid, which totals out to £36K

What do you guys think of the above from a crude working-out POV? Does that sound about right? I am anticipating that Reg 80 will not take into consideration of CT and DT, hence the appeal will be done naturally when the letters drop.

In addition, I have a partner who is a shareholder/director and also receives a salary and dividend payout, but the letter I received (letting me know to expect a Reg 80) was directed to me personally, so not sure if this also applies to the other director too? I am pretty certain it will, but their name isn't on the 'letter' so not sure how that will transpire.

[pete1987]

Looking at the so called support page that Boox posted up yesterday, they mention QDOS tax advisers and David Kirk's group as potential contacts. I am already with David's group, can I assume that QDOS would provide pretty much the same service or should I be talking to them too?

It's absolutely chaos really, Boox have disappeared halfway through doing my company accounts, I've paid them to do my personal return but have heard nothing and now they are advising to put conditional claims in for personal tax but didn't before so I have no idea how to word it!

I am going to try to get as much advice and guidance as possible, I am reaching out to QDOS, David Kirk and WTT just to be sure. As for BOOX (my previous accountants who have dragged me into this mess) are non-compliant and non-responsive so I don't really see any benefit in speaking to these guys at present.

[GregRickshaw]

So, I've spent today trying to work out a rough calculation of what I could potentially owe. I've formatted two routes which actually bottom out to the same figure (which I am leaning on it being the figure I will need to pay if found 'guilty'.

Option 01 – Apply NI and PAYE tax on the combined salary/dividends figure and treat it as a salary so deductions will be at the going rate (depending on which year) and then deducted the DT I've already paid which gives me a total of £35K

Option 02 – Apply NI and PAYE tax on the company turnover then deducted the CP and DT I have already paid, which totals out to £36K

What do you guys think of the above from a crude working-out POV? Does that sound about right? I am anticipating that Reg 80 will not take into consideration of CT and DT, hence the appeal will be done naturally when the letters drop.

In addition, I have a partner who is a shareholder/director and also receives a salary and dividend payout, but the letter I received (letting me know to expect a Reg 80) was directed to me personally, so not sure if this also applies to the other director too? I am pretty certain it will, but their name isn't on the 'letter' so not sure how that will transpire.

I take it that is £36K for the entire 3 years?

The way I have rough thumbed it going also on the spreadsheet CK gave us is. The Employers NI is the closest figure to what we will end up paying, once I took my CT and DT off the determination for PAYE was virtually zero, add back on the Employers NI and I believe the figure to be correct.

If your partner has declared Dividends as an income on their SATR and been taxed that tax might be reclaimable? Really not sure when it comes to that mess. I believe most people who have their partner on the books have partners who earn less than 12K to get the ultimate tax relief?

[pete1987]

I take it that is £36K for the entire 3 years?

The way I have rough thumbed it going also on the spreadsheet CK gave us is. The Employers NI is the closest figure to what we will end up paying, once I took my CT and DT off the determination for PAYE was virtually zero, add back on the Employers NI and I believe the figure to be correct.

If your partner has declared Dividends as an income on their SATR and been taxed that tax might be reclaimable? Really not sure when it comes to that mess. I believe most people who have their partner on the books have partners who earn less than 12K to get the ultimate tax relief?

Yeah, that's 36K over three years with Employee NI added along with PAYE Tax, as opposed to Employer NI (which now makes me question whether that's another tax I have missed out in my calcs). I guess I only calculated from an employee point, so will take my workings back to the drawing board to see how that bottoms out. Is the spreadsheet CK gave you a shareable/accessible thing? Only just because I am literally working this out blind until I speak to a tax specialist who can advise me appropriately. At the moment, I am just trying to digest this whole mess and looking at worst case scenarios in the interim.

As for my partner, yes, she earns less than 12K (similarly to myself) and also has 50% shares so we've split our dividends over the years, and paid the necessary tax on it... which is my confusion on the letter which is only just addressed to myself.

[DealorNoDeal]

As others have mentioned on here, gather up as much evidence as you can that you set up and ran your own business yourself, made all the decisions re:- business bank account, clients, salary + dividends paid, any personal pension payments etc and had as little hand-holding from Boox as possible. It sounds like you already did do a lot yourself having a company website, email, logo, own invoices etc so gather up the evidence for this.

No matter what happens with the cases HMRC are supposedly taking to tribunal.

I hope every single one of you uses your right, under the law, to have your own day at a tribunal. Just represent yourself, you've nothing to lose other than a day of your time.

This is such a piss take by HMRC. They certainly don't deserve for it to be easy.

[GregRickshaw]

No matter what happens with the cases HMRC are supposedly taking to tribunal.

I hope every single one of you uses your right, under the law, to have your own day at a tribunal. Just represent yourself, you've nothing to lose other than a day of your time.

This is such a piss take by HMRC. They certainly don't deserve for it to be easy.

Thanks DorND.

[GregRickshaw]

Yeah, that's 36K over three years with Employee NI added along with PAYE Tax, as opposed to Employer NI (which now makes me question whether that's another tax I have missed out in my calcs). I guess I only calculated from an employee point, so will take my workings back to the drawing board to see how that bottoms out. Is the spreadsheet CK gave you a shareable/accessible thing? Only just because I am literally working this out blind until I speak to a tax specialist who can advise me appropriately. At the moment, I am just trying to digest this whole mess and looking at worst case scenarios in the interim.

As for my partner, yes, she earns less than 12K (similarly to myself) and also has 50% shares so we've split our dividends over the years, and paid the necessary tax on it... which is my confusion on the letter which is only just addressed to myself.

It was on their portal (how ironic) for a while, not sure if it was downloadable, from memory it did what you have done and subtracted your CT paid from the paye determination to give you the actual figure (which at the time virtually wiped out the PAYE amount). The Employers NIC was not factored in at the time as the letters had not yet come for those figures.

The tax I am not sure on at all is our personal NIC contributions, I have not seen the NIC letters to know whether there is an amount there HMRC are asking for 'again' this is why it's not a bad idea to have a tax specialist on board for the calcs etc.,

As to the partner thing I am not sure how that all plays out, receiving dividends from a company is a personal tax matter and as long as she has declared them etc., I don't think those dividend profits can be touched or if your company can make conditional claims against those, I doubt it though.

[cojak]

No matter what happens with the cases HMRC are supposedly taking to tribunal.

I hope every single one of you uses your right, under the law, to have your own day at a tribunal. Just represent yourself, you've nothing to lose other than a day of your time.

This is such a piss take by HMRC. They certainly don't deserve for it to be easy.

This ^^^^

[Guy Incognito]

No matter what happens with the cases HMRC are supposedly taking to tribunal.

I hope every single one of you uses your right, under the law, to have your own day at a tribunal. Just represent yourself, you've nothing to lose other than a day of your time.

This is such a piss take by HMRC. They certainly don't deserve for it to be easy.

+1

I've read the legislation and the case law I'm fairly confident I could win assuming I don't get bamboozled will legal bulltulip.

In any case they will have a long day I have literally 100s of pages of evidence to present.

[Guy Incognito]

Got my NI demand.

Doesn't state the period or provide any kind of calculation.

No sane person would pay this even it were for goods or services provided.