Churchill Knight & Boox clients being investigated as Managed Service Companies

[eek]

'Expected' FTT late 2025 or early 2026. So basically dragging this thing out as long as possible HMRC? Lawyers? probably both ... no one would be surprised to see this run well into 2030.

That's not actually that long when it comes to tax tribunals.

Ideally they would be a lot quicker but it's one of those areas where no-one (except the tax payer) has any incentive to do things quickly.

[Ketto]

Best of luck to all those involved, sounds like a nightmare. If the whole point of this is to try and apply MSC across the board for lots of accountants i’d assumed HMRC would be trying to get a judgement sooner.

[jamesbrown]

If the whole point of this is to try and apply MSC across the board for lots of accountants i’d assumed HMRC would be trying to get a judgement sooner.

That is their goal, at least to apply more generally than these accountants, and the tribunal timeframe is pretty vanilla, tbh. These things take years.

[GregRickshaw]

Best of luck to all those involved, sounds like a nightmare. If the whole point of this is to try and apply MSC across the board for lots of accountants i’d assumed HMRC would be trying to get a judgement sooner.

The longer this has gone on I've changed my mind several times on the underlying logic.

From scaring (contractors inside IR35) to applying across the board to catch more and strengthen the legislation (or prove it maybe)...

These days though I'm convinced HMRC see this as nothing underlying, have no agenda they (HMRC) simply believe they have every right to collect this allegedly avoided tax and have solid cases.

Everything the lawyers have thrown at them has been duly dealt with correctly, from dropping cases which couldn't possibly be MSCs to applying correctly and dropping the 50% or less PSCs... HMRC have simply sharpened their axe and cut the rope of the cases they included incorrectly.

Make no mistake here HMRC win this. PoA if you can.

[woody1]

If I was using an accountancy firm that operated anything like CK or Boox, I'd get out now.

If HMRC win this case, they're bound to test the boundaries even further and, as we know, they can go back 4 years.

[gikap]

... to applying correctly and dropping the 50% or less PSCs...

How sure are we about this? I got a lot less than 50% out for every single year yet HMRC hasn't dropped my case. How do i make them look again into my case?

[GregRickshaw]

If I was using an accountancy firm that operated anything like CK or Boox, I'd get out now.

If HMRC win this case, they're bound to test the boundaries even further and, as we know, they can go back 4 years.

I think if there were anymore to go after they would have started going after them by now.

Most of us are convinced HMRC started the investigation into CK around 2012 as this is when they 'almost overnight' stopped the payment advice, the dividends advice etc., took HMRC another 10 years to actually announce the investigation was open.

Then again maybe that's happening right now to others, as always ... who knows.

However if HMRC wait until 2030 and the likely final outcome of this, they will have lost an awful lot of revenue.

The Chritianyou case didn't really open the floodgates

and only go back 4 years? This is HMRC we are dealing with they'll go back as far as they like.

[GregRickshaw]

How sure are we about this? I got a lot less than 50% out for every single year yet HMRC hasn't dropped my case. How do i make them look again into my case?

Who do you want to make look at your case? Your lawyers, your tax advisors, your accountant, HMRC?

Don't leave it to anyone else get your tax lawyer/advisor on it right away. My two years were thrown out by CK and their lawyers sure but I pushed HMRC very hard personally with my tax advisors to look at my case.

The 50/50's were thrown out by HMRC and CK lawyers because some of the test cases HMRC chose as lead cases were less than 50% ers.

[woody1]

and only go back 4 years? This is HMRC we are dealing with they'll go back as far as they like.

They can only assess 4 years back under discovery.

If they win against you guys, you can bet your bottom dollar they'll try and find a way of making the judgment fit other accountancy arrangements. Just like they made the CBS win fit CK and Boox.

[jamesbrown]

If they win against you guys, you can bet your bottom dollar they'll try and find a way of making the judgment fit other accountancy arrangements. Just like they made the CBS win fit CK and Boox.

This. Long time frames and opportunity costs are BAU for HMRC. They seek to probe, clarify and extend the interpretation of the legislation in their favour, and this happens incrementally over time. The idea that they will stop at CK and Boox is for the birds when there are much bigger players out there with a similar business model and practices that are as bad or worse than CK and Boox. They have the time and money to see where these tribunals lead. In the mean time, it all serves as a deterrent to operating a contracting business, about which they will lose little sleep.