Reply to: Churchill Knight & Boox clients being investigated as Managed Service Companies

[Ketto]

"He can still make a payment on account if he wishes to avoid any further interest accruing whilst he waits for the outcome of his appeals <sometime in the 2030s>."

[geekergosum]

I wrote to my MP at the beginning of the year, and they have contacted HMRC...finally HMRC came back and gave the following response:

Given the impact that XXXXXX has detailed, we have worked closely with our extra support team during the case and pointed him towards the help available. If there is anything else we can do to support him further, he should tell us so that we may put in place any reasonable adjustments. He can find information about the additional support which is available at www.gov.uk/get-help-hmrc-extra-support.

The law requires us to charge interest. We calculate and charge interest daily from the date the tax becomes due until customers pay it in full. We cannot alter or set aside the interest charges, and it will continue to accrue while waiting for the appeal to take place.

We also told Mr XXXXXXX that he could make a payment on account to limit the interest charged if the MSC rules were deemed to apply. He can still make a payment on account if he wishes to avoid any further interest accruing whilst he waits for the outcome of his appeals.

If Mr XXXXXXX disagrees with the interest charges, he can make an objection once he has paid all the tax due.

We know that facing a large tax bill can be stressful. We have a range of options to help customers who are struggling to pay their Corporation Tax liabilities in full, including affordable time to pay arrangements. Mr XXXXXXX can find more information about this at: http://www.gov.uk/guidance/find-out-...ay-arrangement.

So...if you are stressed about interest and paying this bill...the answer is...pay the bill.

and the extra support is ... help to pay your bill.

I did get an apology for them missing deadlines or not responsive on time, as well as not fully correct details. But that was all...but if we are late, or incorrect, the tax payer is punished.

Thank God for anti-depressants!

[rdw1970]

In case anyone missed this on the latest news page.....

https://www.contractoruk.com/news/sh...eemed-shocking

[howbigmassive]

Did you POA?

No, I did not POA.

[jamesbrown]

Hi, please can you confirm that pension contributions are not included in the DEP calculation? I am being asked to provide them by HMRC.
Also what is the calculation to determine if I can be excluded using condition 61B(1)(b)?
Many thanks...

The calculation is more than 50% of the total turnover generated by the services and that includes all forms of payment or money's worth (salary, dividends, pension contributions etc.). However, allowable pension contributions will not form part of any tax due, they will be deducted from the total when calculating the tax due under the DEP.

[GregRickshaw]

For those following the recent developments, my company Carbon Six has been involved in a protracted appeal against HMRC.

The Tribunal’s judgment has now been released. In it, HMRC’s conduct throughout the appeal was described by the Judge as ‘shambolic and haphazard’. Paragraphs 100 and 122 are particularly illuminating regarding the Revenue’s approach to these proceedings.

HMRC failed to meet the deadlines and directives issued by the Tribunal. Despite a formal warning that they would be barred if they did not comply, they subsequently failed to meet a second ‘Unless Order’.

HMRC applied to set aside the barring at a hearing on 14 January 2026. However, the Tribunal found that their application and skeleton argument contained incorrect and/or misleading statements (paragraph 122). Their excuses for the procedural failures were deemed ‘bad’ reasons, and the bar was upheld. As HMRC had failed to issue a Statement of Case, the Judge summarily allowed my appeal.

While the merits of the underlying tax case were not fully assessed due to the barring, the judgment highlights where HMRC’s conduct fell short of their duty to the court. Specifically:

• HMRC attempted to rely on superseded law (citing the Upper Tribunal decision in BPP), despite that logic being overturned or superseded by the Court of Appeal and Supreme Court.
• HMRC’s arguments—that a barring would lead to an ‘inequality of arms’ or a ‘windfall’ for the taxpayer—were specifically rejected as they ignored the binding precedents set by the higher courts.

I hope this provides some clarity for other contractors dealing with similar procedural issues. The case serves as a reminder that the Revenue is as bound by the Tribunal’s directives as any taxpayer.

Did you POA?

[sbs3]

I've managed to settle my case with the HMRC, I thought I'd share my experience.

My first two years were removed from the investigation as I didn't pay myself much from the business, which meant I didn't meet either 61B(1)(b) or 61B(1)(c). Only the final year came under consideration.

HMRC consider pension contributions to be 'payments to the individual' for the purposes of meeting 61B(1)(b) but do not include these contributions in the DEP calculation as they do not consider them as 'general earnings from employment'. Allowable business expenses were also deductible from the DEP total.

Once the DEP calculation was complete, I had to submit separate claims for corporation and dividend tax overpayments. However, I didn't have to pay the outstanding bill and wait for separate overpayment refunds, rather the overpayments were included in the calculation for the final outstanding payment.

No penalties were applied.

During the tax year in question my total income didn't exceed the higher tax rate threshold, I didn't split dividends with anyone else and I made significant pension contributions. So my personal circumstances meant that the overpayments pretty much wiped out the total outstanding tax and NI bill.

Being honest, once I made it known to the HMRC that I would be willing to come to a figure and settle, the individual officer I dealt with was quite reasonable and we resolved the matter fairly amicably.

Hi, please can you confirm that pension contributions are not included in the DEP calculation? I am being asked to provide them by HMRC.
Also what is the calculation to determine if I can be excluded using condition 61B(1)(b)?
Many thanks...

[rdw1970]

I've just got a letter this morning stating that the Boox MSCP lead cases are hitting the tribunal on the 15th June 2026 and that the hearing is expected to last 10 days.

This is ridiculous that it has gone on so long...It is also quite unfair that those of us who represented our cases and put in appeals are now targeted whilst those that ignored HMRC's bullying have been let off.

AFAIA there is just the one test case as the tribunal concerns a debt transfer notice from one Ltd Co to Boox (or The APP Accounting Group) to the Directors(s) of TAAG.

You're right, it is ridiculous but not surprising that its taken 4 years to get this stage and approx 250 Boox clients may have got off the hook by not responding to HMRC.

[Fuzzynavel]

I've just got a letter this morning stating that the Boox MSCP lead cases are hitting the tribunal on the 15th June 2026 and that the hearing is expected to last 10 days.

This is ridiculous that it has gone on so long...It is also quite unfair that those of us who represented our cases and put in appeals are now targeted whilst those that ignored HMRC's bullying have been let off.

[howbigmassive]

I actually understand from my Tribunal in January this year (which did not consider the merits of the case, but upheld a barring order against HMRC in [2026] UKFTT 177 (TC)) that one group of test cases (I don't recall if it is CKA or TAAG) is likely to start in June 2026. There could be delays to that, but I'd expect at least an FTT hearing and judgment well before 2030, with expected appeals to UT and then higher, which means that the expected timeline for definitive judgment could be close to 2030.

[eek]

Churchill Knight / MSC Dispute – Anyone used the "Hays On-Site" defence for Debt Transfer?


Hi all, I’m one of the thousands caught in the Churchill Knight / HMRC Managed Service Company (MSC) investigation for the 2017/18 and 2018/19 tax years.

I’ve recently dug up some old onboarding documents from 2014 that show a very clear link between Hays Talent Solutions and Churchill Knight. Specifically, my "New Client Checklist" from CK has a mandatory step: "Agency informed of account activation?"

I’ve also identified the specific Hays consultant who was embedded on-site at UBS at the time. Their LinkedIn even confirms they were "on-site via Hays Talent Solutions" during my onboarding period in 2014.

My argument to HMRC is that this wasn't my choice of accountant—it was a mandated corporate workflow facilitated by the recruiter. Under Section 61D, I’m pushing for Debt Transfer to Hays as the "Involved" third party.

Has anyone else successfully used an "On-Site Agency" defense?
With the test cases supposedly pushed back to 2030, I’m wondering if naming the on-site rep makes HMRC more likely to "stay" the case or look at the agency instead.

Any advice or similar experiences would be massively appreciated!

the conclusion of that argument is that you were 100% inside IR35 but you are talking about a time when you were responsible for the assessment and payment of tax.

i wouldn’t personally use that argument

[Domglym]

Churchill Knight / MSC Dispute – Anyone used the "Hays On-Site" defence for Debt Transfer?


Hi all, I’m one of the thousands caught in the Churchill Knight / HMRC Managed Service Company (MSC) investigation for the 2017/18 and 2018/19 tax years.

I’ve recently dug up some old onboarding documents from 2014 that show a very clear link between Hays Talent Solutions and Churchill Knight. Specifically, my "New Client Checklist" from CK has a mandatory step: "Agency informed of account activation?"

I’ve also identified the specific Hays consultant who was embedded on-site at UBS at the time. Their LinkedIn even confirms they were "on-site via Hays Talent Solutions" during my onboarding period in 2014.

My argument to HMRC is that this wasn't my choice of accountant—it was a mandated corporate workflow facilitated by the recruiter. Under Section 61D, I’m pushing for Debt Transfer to Hays as the "Involved" third party.

Has anyone else successfully used an "On-Site Agency" defense?
With the test cases supposedly pushed back to 2030, I’m wondering if naming the on-site rep makes HMRC more likely to "stay" the case or look at the agency instead.

Any advice or similar experiences would be massively appreciated!

[enda1]

Any date for an FTT hearing yet?

Sadly, I can see this dragging on for many years, possibly well into the 2030s. It's a complex case and, even if HMRC lost at the FTT (unlikely I know), they're bound to appeal to the UTT->CofA->SC.

Anyone caught up in this has my sympathy. You are being treated very unfairly and as though you used a dodgy tax avoidance scheme.

11th - 27th November, with reading days the 9th and 10th. At least this is for CK anyway. No idea for Boox.

[howbigmassive]

For those following the recent developments, my company Carbon Six has been involved in a protracted appeal against HMRC.

The Tribunal’s judgment has now been released. In it, HMRC’s conduct throughout the appeal was described by the Judge as ‘shambolic and haphazard’. Paragraphs 100 and 122 are particularly illuminating regarding the Revenue’s approach to these proceedings.

HMRC failed to meet the deadlines and directives issued by the Tribunal. Despite a formal warning that they would be barred if they did not comply, they subsequently failed to meet a second ‘Unless Order’.

HMRC applied to set aside the barring at a hearing on 14 January 2026. However, the Tribunal found that their application and skeleton argument contained incorrect and/or misleading statements (paragraph 122). Their excuses for the procedural failures were deemed ‘bad’ reasons, and the bar was upheld. As HMRC had failed to issue a Statement of Case, the Judge summarily allowed my appeal.

While the merits of the underlying tax case were not fully assessed due to the barring, the judgment highlights where HMRC’s conduct fell short of their duty to the court. Specifically:

• HMRC attempted to rely on superseded law (citing the Upper Tribunal decision in BPP), despite that logic being overturned or superseded by the Court of Appeal and Supreme Court.
• HMRC’s arguments—that a barring would lead to an ‘inequality of arms’ or a ‘windfall’ for the taxpayer—were specifically rejected as they ignored the binding precedents set by the higher courts.

I hope this provides some clarity for other contractors dealing with similar procedural issues. The case serves as a reminder that the Revenue is as bound by the Tribunal’s directives as any taxpayer.

[geekergosum]

Any date for an FTT hearing yet?

Sadly, I can see this dragging on for many years, possibly well into the 2030s. It's a complex case and, even if HMRC lost at the FTT (unlikely I know), they're bound to appeal to the UTT->CofA->SC.

Anyone caught up in this has my sympathy. You are being treated very unfairly and as though you used a dodgy tax avoidance scheme.

The general consensus seems to be when HMRC get round to it.

"They're busy"

This was the crux of my letter to my MP. In my case I acted promptly and all the delays or non-response have been on HMRC's side (almost like them dragging their feet means they can either accrue more interest on settlements or look to charge more at the end) which makes this grossly unfair. IF I had delayed myself the initial appeal then I would also have been laughing now as their incompetence led to timing out.

I still don't get their conditions for being an MSC.

A person is NOT an MSC Provider if they are merely "providing legal or accountancy services in a professional capacity."