Churchill Knight & Boox clients being investigated as Managed Service Companies

[eek]

It doesn't work like that. Under the CPR, lead cases have to be agreed between the legal representatives of the appellants and HMRC. HMRC can't just cherry pick cases that suit them.

Remember I'm just utterly cynical. I suspect the ideal test cases for the people involved (say a company employing staff members on fee earning work and similar) are the ones HMRC have already removed from the equation.

And if we look at your approach and think about the lead cases in the CBS case - they weren't exactly the best examples to help CBS win the case.

[GregRickshaw]

It did hit national newspapers fairly early on, again depends on who reads them.

It's true many contractors I used to speak with barely know what any legislation is around and truly run their LTDs as a tax avoidance.

Who also, aside from here, knows about the Loan Charge etc., etc.,

You're possibly right about the general populous of contractors, however the accountants and providers will be sitting up and taking notice.

Anyway I think we are in for a quiet 2023 seems all new letters are out and nothing likely to happen to 2024.

It's time for those still involved to try to get on with their lives.

[DealorNoDeal]

Remember I'm just utterly cynical. I suspect the ideal test cases for the people involved (say a company employing staff members on fee earning work and similar) are the ones HMRC have already removed from the equation.

And if we look at your approach and think about the lead cases in the CBS case - they weren't exactly the best examples to help CBS win the case.

CBS was a totally contrived arrangement; they created all the PSCs (with the same registered address and company secretary), invoiced the end-clients, managed the bank accounts and salary/dividend payments etc (basically micro-managing them).

It's highly unlikely that one of their PSCs would be distinguishable from any other. With this type of "scheme", HMRC wouldn't care who the lead cases were because it would make little difference. Likewise, I doubt CBS could have put forward any good cases.

[eek]

CBS was a totally contrived arrangement; they created all the PSCs (with the same registered address and company secretary), invoiced the end-clients, managed the bank accounts and salary/dividend payments etc (basically micro-managing them).

It's highly unlikely that one of their PSCs would be distinguishable from any other. With this type of "scheme", HMRC wouldn't care who the lead cases were because it would make little difference. Likewise, I doubt CBS could have put forward any good cases.

And my point is that HMRC are removing the best cases (the ones that clearly demonstrate that CK were merely an accountancy firm) before they even hit the first tribunal.

[DealorNoDeal]

And my point is that HMRC are removing the best cases (the ones that clearly demonstrate that CK were merely an accountancy firm) before they even hit the first tribunal.

If the folks posting here are in any way representative, that will still leave a lot of very good cases even if HMRC are removing the best.

I'd love to know how the lead cases are being agreed because I imagine that might be quite contentious.

[jofo]

From day one this investigation has a not even hidden agenda and that is to drive contractors away from LTDs and to push the boundaries of the legislation as much as they can to further prevent those intending on LTD/PSC style operations from taking that route. FWIW I believe it's worked.

Too right, it is working. In my case, due to the type of work I undertake, just the fact that HMRC have issued a determination / launched an investigation into my company means that I can no longer contract with my clients directly. There are standard clauses in the contracts that state you must declare if an investigation is initiated and if so the contract will be terminated immediately. The clauses also cover the director in a personal capacity, so I can't simply just start a new company to get around it.

I am effectively "guilty until proven innocent". Note: I don't blame my clients, as they are just rightly protecting themselves.

It means even though my latest contract is outside IR35, I've been effectively forced into using an umbrella company.

Thus I am trying to way up the options on this whole thing, should I wait and fight it out, or just negotiate with HMRC w.r.t the liability, and then pay it off so that I can resume operating as normal as soon as possible. If this case goes on for a long time, which i suspect it will. It'll probably end up costing me more just waiting/fighting than paying.

[DealorNoDeal]

From day one this investigation has a not even hidden agenda and that is to drive contractors away from LTDs and to push the boundaries of the legislation as much as they can to further prevent those intending on LTD/PSC style operations from taking that route. FWIW I believe it's worked.

I expect it's also to nobble the contractor accountancy industry who HMRC no doubt regard as "facilitators of avoidance".

[DealorNoDeal]

Have CK mentioned anything about Rule 18 of the FTT rules being applied? See page 10:

https://www.judiciary.uk/wp-content/....08.11.doc.pdf

If Rule 18 is applied, you would only become a "party" to it, and bound by the outcome, if you apply to the FTT to be treated as such. If you make no such application, then you will not be bound by the decision, and will be free to pursue your own individual appeal.

[Chevalier]

Have CK mentioned anything about Rule 18 of the FTT rules being applied? See page 10:

https://www.judiciary.uk/wp-content/....08.11.doc.pdf

If Rule 18 is applied, you would only become a "party" to it, and bound by the outcome, if you apply to the FTT to be treated as such. If you make no such application, then you will not be bound by the decision, and will be free to pursue your own individual appeal.

HMRC can issues follower notices though which are a nasty piece of work!

[nekro]

For those that have made PoA. Did you do anything other than simply quoting your SAFE reference number when making the payment?
I've just spoken with the HMRC Payments team and they have advised that if you have a SAFE reference number beginning with 'X' the payment can only be used for that specific demand.

The reason I'm asking is because I'm aware that others have made PoA but subsequently found their payment has been used for other demands.