What makes Churchill Knight & Boox different to other accountants

[davetza]

Is someone able to summarise why contractors that used Churchill Knight & Boox are being investigated for using an MSC versus other accountancy services? I'm trying to understand what the risk is of HMRC expanding this investigation to other accountancy providers including mine and what I can do to mitigate the risk and I must admit I am finding all the articles on this as clear as mud. One of the articles on ContractorUK says you should ask your accountants if they consider themselves an MSC but I don't see much value in that as it is HMRC's opinion that counts.

[northernladuk]

Plenty of articles about it linked below but in a nutshell they've potentially stepped over the line between providing a simple accountancy service and managing the contractors affairs to closely. Below is a very quick and dirty overview which will give you a general idea. You'll have to go look at other articles and dig through the massive thread for details but I think the below should answer your question from at a high level.

There is also the element of switching you between accountancy and umbrella therefore owning all your business so you don't look like you are in business in your own right. Looks more like they control everything you do. It's complex and all arguable and I'm sure I've missed a ton of pertinent stuff that's dealt with in the massive thread but hopefully it's a start in a single post.

https://www.accountancyage.com/2022/...msc-crackdown/

https://www.osborneclarke.com/insigh...sc-enforcement

Legislation below with some highlighted areas that could arguably been in play here.

https://www.legislation.gov.uk/ukpga...61B?view=plain

Meaning of “managed service company”


(1)A company is a “managed service company” if—

(a)its business consists wholly or mainly of providing (directly or indirectly) the services of an individual to other persons,

(b)payments are made (directly or indirectly) to the individual (or associates of the individual) of an amount equal to the greater part or all of the consideration for the provision of the services,

(c)the way in which those payments are made would result in the individual (or associates) receiving payments of an amount (net of tax and national insurance) exceeding that which would be received (net of tax and national insurance) if every payment in respect of the services were employment income of the individual, and

(d)a person who carries on a business of promoting or facilitating the use of companies to provide the services of individuals (“an MSC provider”) is involved with the company.

(2)An MSC provider is “involved with the company” if the MSC provider or an associate of the MSC provider—

(a)benefits financially on an ongoing basis from the provision of the services of the individual,

(b)influences or controls the provision of those services,

(c)influences or controls the way in which payments to the individual (or associates of the individual) are made,

(d)influences or controls the company's finances or any of its activities, or

[northernladuk]

I know it's a bane but if you are asking that question, particularly if you are involved you really should have a good read of the thread about it https://forums.contractoruk.com/hmrc...companies.html

It's long but it does cover all the elements as to what's happening and all the arguments for and against.

Remember this is what HMRC think and is being challenged and all come to naught if Boox and CK successfully challenge. Don't take it as gospel until we know the outcome.

[northernladuk]

One of the articles on ContractorUK says you should ask your accountants if they consider themselves an MSC but I don't see much value in that as it is HMRC's opinion that counts.

It does but the accountants will have looked at the situation, investigated HMRC's approach and applied it to themselves. For example, I spoke to my accountant Gorilla about this and they pointed out how their working practices differ and they are positioned to provide purely accounting services only. Any decision is left to me, everything is presented to me and I have to read, understand and sign off. No decisions or actions are taken without my say so etc. I am fully in control of my finances with them providing basic services, advice and guidance.

Any decent accountant will be sitting up and watching this closely and will be able to explain to you why they are different to Boox/CK and prove that by describing their operation.

[cojak]

And there’s this as well. https://forums.contractoruk.com/acco...ntractors.html

[davetza]

And there’s this as well. https://forums.contractoruk.com/acco...ntractors.html

Thanks, I completely missed the sticky . Though it feels like a lot is unknown but I am going to assume if HMRC are successful with their current investigations they ill widen the net and who knows what that will look like.

[DealorNoDeal]

Though it feels like a lot is unknown but I am going to assume if HMRC are successful with their current investigations they ill widen the net and who knows what that will look like.

That's not an unreasonable assumption, given that they already massively widened the net by going from a win against an Isle of Man scheme (CBS) to CK/Boox.

[eek]

Is someone able to summarise why contractors that used Churchill Knight & Boox are being investigated for using an MSC versus other accountancy services? I'm trying to understand what the risk is of HMRC expanding this investigation to other accountancy providers including mine and what I can do to mitigate the risk and I must admit I am finding all the articles on this as clear as mud. One of the articles on ContractorUK says you should ask your accountants if they consider themselves an MSC but I don't see much value in that as it is HMRC's opinion that counts.

Oh that's easy - they were picked because there were of a suitable size for HMRC to target - much smaller and they wouldn't generate enough money to justify the work required, much larger and the firm would have got lawyers to shut things down quickly..

And when HMRC widens things - I can see some very interesting examples being used.

[Guy Incognito]

I spoke to my accountant Gorilla about this and they pointed out how their working practices differ and they are positioned to provide purely accounting services only. Any decision is left to me, everything is presented to me and I have to read, understand and sign off. No decisions or actions are taken without my say so etc. I am fully in control of my finances with them providing basic services, advice and guidance.

This describes my relationship with Boox and where has that got me?

[Fred Bloggs]

This describes my relationship with Boox and where has that got me?

Simple. You aren't an MSC and Boox aren't your MSC provider. That's how the legislation is written. But Hector is trying very hard to stretch his previous MSC legislation case victory to areas we all thought weren't brought under the original legislation. If you have proof of only a vanilla book keeping service and have this all documented properly, then you should be fine***. Eventually. Truth is nobody at this stage can tell.

***My own opinion is that if you paid for one of the fully hands off premium business packages advertised and offered by various accounts companies. All bets are off. Under those circumstances, I think you’re likely stuffed.