Churchill Knight & Boox clients being investigated as Managed Service Companies

[jamesbrown]

Sorry, I think I'm missing something... why are you expecting a refund? Did you pay first and then 2 of your years were considered not to be affected by HMRC's claim?

Have you chased it with HMRC and they are not even responding to your requests to return the money? Can they even do that and retain your money without any reasonable cause? If it was the other way around they'd burn us with everything they could.

Yes, they are slow-balling the repayment of his PoA for years that they seemingly accepted are out of scope (either that or they didn't really accept it, but it sounds like the former).

[jofo]

Hi Everyone, every so often i check to see if there has been any court activity related to the TAAG/Boox cases. I was a client of theirs and have been caught up in this saga. By the looks of it, at the end of last month TAAG were successful in adding themselves as a "respondent" onto the appeals for two of their client companies.

From what I have understood, this now allows them to have an active role in defending the "MSC Provider Claims" in those cases rather than simply supplying evidence, and letting the client companies argue on their behalf. I think this could be positive move, but if they lose their arguments then the window of appeal will narrow for all the cases that follow.

Here is the link to the judgement: The APP Accounting Group Limited v Uberdev Limited & Anor - Find case law - The National Archives

Interesting that the HMRC has still not officially selected the lead cases.

Although no direction as to lead cases has been made under Rule 18 of the Tribunal Rules, Ms Dhanoa (appearing for HMRC) confirmed that HMRC intended to apply for such a direction and acknowledged that, if a direction is made, it may well be the case that the appeals made by Uberdev and Rosetta will be designated as the lead cases.

[GregRickshaw]

The tax advisors do see this a positive move in the alleged MSC and MSCPs favour.

CKA are doing the same

Lead cases for CKA have been chose by both parties.

[GregRickshaw]

Sorry, I think I'm missing something... why are you expecting a refund? Did you pay first and then 2 of your years were considered not to be affected by HMRC's claim?

Have you chased it with HMRC and they are not even responding to your requests to return the money? Can they even do that and retain your money without any reasonable cause? If it was the other way around they'd burn us with everything they could.

I did PoA yes all three years, however two of the years were 'thrown out' for want of better words.

HMRC have not confirmed once when and how they will return the money. They have confirmed through my tax advisors in writing my company has no place in the years 17/18 & 18/19. I suspect they are holding onto the money because I'm involved in 19/20 (by this time I was a PSC). One never really knows fully just what is going on inside HMRC, including HMRC!

[Snooky]

I did PoA yes all three years, however two of the years were 'thrown out' for want of better words.

HMRC have not confirmed once when and how they will return the money. They have confirmed through my tax advisors in writing my company has no place in the years 17/18 & 18/19. I suspect they are holding onto the money because I'm involved in 19/20 (by this time I was a PSC). One never really knows fully just what is going on inside HMRC, including HMRC!

Apologies if I've missed you mentioning this in the preceding 275 pages, but what does your MP say about HMRC holding on to money they have no right to hold on to? I assume you've spoken to him/her about this? If not, I would - worst case, nothing happens; best case, he starts asking awkward questions and HMRC cough up.

[GregRickshaw]

Apologies if I've missed you mentioning this in the preceding 275 pages, but what does your MP say about HMRC holding on to money they have no right to hold on to? I assume you've spoken to him/her about this? If not, I would - worst case, nothing happens; best case, he starts asking awkward questions and HMRC cough up.

My tax lawyers/advisors have dealt with HMRC not my MP.

[SamRob]

Hi there, first off there are many of us here (and in other groups away from CUK) who this has affected and we know what you are going through this is a bad situation, but as with all situations there are always ways 'through' them try to stay strong.

I'll answer your question first though.

I would say around 50% have Paid on Account (PoA) which is very different to just paying what they have asked for.

HMRC don't really know what they are asking for at the moment their figures vary massively.

Paying on account is not an admission of the figures , all you (your business) is doing is paying an amount which HMRC 'claim' is owed onto YOUR HRMC account, which will stop any interest occurring when this case is finally sorted, likely to be around 2028 (best estimate).

What I mean about HMRC not really knowing is because they have sent two very different claims to your business one for 'PAYE amounts' and one for NIC amounts.

The PAYE will be virtually wiped out if HMRC win because HMRC will have to give you back all your Corporation Tax and Dividend Tax. The one HMRC are really going for is the NIC payments. So this is the problem no-one knows exactly what the figures are.

There are many good templates to appeal against CT and DT and hopefully you have already appealed the decision, either by yourself or with tax advisors or tax lawyers etc.

If your business has the funds, I would advise doing this as you can then go on with your business and if HMRC win you will not have to find an inflated figure.

Hopefully you will have gathered every tiny bit of evidence you can find to say how you ran your business yourself, this includes everything (proof of bank account setup, proof of knowing the name of your business!, letterheads, invoices, websites, business cards.... the list cannot be too big).

HMRC cannot ignore your evidence, my own case for the first two years were thrown out, because I was more than a one person LTD I ran a full on consultancy. Make sure HMRC are aware of your unique circumstances.

Hang on in there, in worst case scenario, HMRC do grant long TTP agreements, this means you can get your life back, you'd be surprised how you can afford it. I had a long TTP thanks to getting mixed up in DR many years ago.

Talk to your MP, explain the human side of this scandal they (the MPS) will fight your corner.

Stay strong there is help everywhere.

Thank you so much for coming back on this. I asked HMRC to look into my case specifically so I could get some accurate figures. The net amount is less than 10% of what they were asking for. However, the interest is calculated on the gross amount so quite a big number. Also, they won't let me pay the net figure - I have to pay the full amount and claim back.
There is just no common sense here. Based on their own calculations, HMRC actually owed me money for one of the 3 years! It would be laughable if it wasn't so draining.
Thanks again for your response.

[SamRob]

You're not alone. Hang in there. Hopefully you have some robust evidence in your favour. Be prepared however that HMRC have no ethics, mercy, sense of logic or are capable of sensibly dealign with this matter.

I did not pay on account. I estimate it would be hard to get the funds back promptly once they have them after this outrageous extortion attempt is quashed.

HMRC so far want three tax years. I assume that's the case for most of us. In my case the defence is as follows:
- in the first year under consideration I did not receive more than half of the company's revenue as per 1(b) of https://www.legislation.gov.uk/ukpga/2003/1/section/61B
- in the latter two years my company wasn't a client of the "MSCP" (I appointed a different accountant and broke any contact with the "MSCP")

HMRC have so far ignored the above evidence (new accountant contract+old accountant disengagement email, bank statements for the 1(b) rule etc) and sent a templated response about waiting for the test cases. I have also compiled extensive evidence of emails, statements, agreements etc of me running my own business as a backup. I fully expect them to raise another set of demands for the following years even though I have had nothing to do with the MSCP for years. To top it all, like others, I've been coerced into a standstill agreement re NICs.

[/QUOTE]
Thank you so much for coming back on this. I asked HMRC to look into my case specifically so I could get some accurate figures. The net amount is less than 10% of what they were asking for. However, the interest is calculated on the gross amount so quite a big number. Also, they won't let me pay the net figure - I have to pay the full amount and claim back.
There is just no common sense here. Based on their own calculations, HMRC actually owed me money for one of the 3 years! It would be laughable if it wasn't so draining.
Thanks again for your response.

[SwissSaffa]

If the contractor signs a standstill agreement, does it mean the NICs as stated by HMRC now are due regardless of the outcome of tribunals

or

Will they still recalculate what is due based on the outcome of tribunals, company and corporation tax paid etc.

ie. The NICs due could change or be zero based on potential tribunals, it just means that they can still pursue the contractor for NIC after 6 years (if it is subsequently determined that NIC is due)

[jamesbrown]

If the contractor signs a standstill agreement, does it mean the NICs as stated by HMRC now are due regardless of the outcome of tribunals

or

Will they still recalculate what is due based on the outcome of tribunals, company and corporation tax paid etc.

ie. The NICs due could change or be zero based on potential tribunals, it just means that they can still pursue the contractor for NIC after 6 years (if it is subsequently determined that NIC is due)

There will be no tax or NICs due if HMRC eventually lose, but that could take a very long time through the tribunals and courts. So, no, it has nothing to do with eventual liability.