"SavetheUKCC" petition

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John Upham
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Re: "SavetheUKCC" petition

Post by John Upham » Mon Aug 22, 2016 6:20 pm

Jonathan Bryant wrote:
Alan Kennedy wrote:Will the ECF be making the Official receiver an offer.
Why would the ECF do this?

Traci Whitfield, the ECF Director of Junior Chess and Education made an impassioned speech at the start of the final round describing her and the ECF's support for the UK Chess Challenge.

Her son, Craig provided the commentary using various runners between the top boards and the commentary room as David Clayton was not able to provide the live boards and live games due to a foot injury.
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Roger Lancaster
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Re: "SavetheUKCC" petition

Post by Roger Lancaster » Mon Aug 22, 2016 6:27 pm

Well, contrary to an earlier post, it's not entirely speculation since HMRC has now succeeded in obtaining a Bankruptcy Order, as Adam has pointed out, against Mike Basman in the sum of £300k alleged VAT due. The "administrative problem", as Richard puts it, would seem to be that VAT was reckoned to be due but unpaid. Whether this was a total failure to pay VAT at all or an insufficiency is not 100% clear. However, unless the law has changed since I last looked, invoices from VAT-registered businesses are required to identify the VAT element and also quote the seller's VAT registration number. My Bourne End namesake clarifies that Mike, trading as UKCC, was a VAT-registered supplier so any omission here was an extremely serious business failing, as events have proved, through failing to charge the VAT it was required to charge.

Bankruptcy is at best tiresome and at worst detrimentally life-changing so my sympathies to Mike and anyone else affected. But, prima facie, this pinpoints the liability for the alleged £300k debt and opens the door to any other person or organisation able and willing to take over (Mike will probably be under constraints as to what he can and cannot undertake) the project. There is absolutely no reason for the ECF to donate voluntary sums to HMRC (and, in fact, every reason why it should not!) and I would have every confidence in the ECF reaching the same decision.

However, and finally, it's entirely conceivable that the £300k relates only to alleged VAT up to a specific date, leaving open the possibility that HMRC could come back for a second bite for more recent VAT, so any new person or organisation should probably take considerable care to distance themselves from UKCC's earlier existence.

John Upham
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Re: "SavetheUKCC" petition

Post by John Upham » Mon Aug 22, 2016 6:29 pm

Michael Flatt wrote:
Jonathan Bryant wrote:
Alan Kennedy wrote:Will the ECF be making the Official receiver an offer.
Why would the ECF do this?
I don't see the ECF stepping in either. Perhaps, one of Mike's co-organisers might replicate the event, under a different name, and engage him as a consultant. It would need to be restructured to overcome the VAT problem.

Delancey was an important sponsor. Would they want to continue?

One possibility would be to split the UKCC season such that the turnover for each component was less that the VAT threshold. I imagine the critical layer is the Megafinal one.

So we have

The Schools stage in February / March / April

The Megafinal stage in April / May June

The Gigafinal stage in July

The Terafinal in August

I would think Schools, Gigafinals and Terafinal could be grouped and the Megafinals would need to be abstracted.

J.
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Re: "SavetheUKCC" petition

Post by John Upham » Mon Aug 22, 2016 6:36 pm

Roger Lancaster wrote:Well, contrary to an earlier post, it's not entirely speculation since HMRC has now succeeded in obtaining a Bankruptcy Order, as Adam has pointed out, against Mike Basman in the sum of £300k alleged VAT due. The "administrative problem", as Richard puts it, would seem to be that VAT was reckoned to be due but unpaid. Whether this was a total failure to pay VAT at all or an insufficiency is not 100% clear. However, unless the law has changed since I last looked, invoices from VAT-registered businesses are required to identify the VAT element and also quote the seller's VAT registration number. My Bourne End namesake clarifies that Mike, trading as UKCC, was a VAT-registered supplier so any omission here was an extremely serious business failing, as events have proved, through failing to charge the VAT it was required to charge.

Bankruptcy is at best tiresome and at worst detrimentally life-changing so my sympathies to Mike and anyone else affected. But, prima facie, this pinpoints the liability for the alleged £300k debt and opens the door to any other person or organisation able and willing to take over (Mike will probably be under constraints as to what he can and cannot undertake) the project. There is absolutely no reason for the ECF to donate voluntary sums to HMRC (and, in fact, every reason why it should not!) and I would have every confidence in the ECF reaching the same decision.

However, and finally, it's entirely conceivable that the £300k relates only to alleged VAT up to a specific date, leaving open the possibility that HMRC could come back for a second bite for more recent VAT, so any new person or organisation should probably take considerable care to distance themselves from UKCC's earlier existence.

Mike explained to me on Sunday that he took the view that despite being VAT registered he did not have the resources to not only charge VAT and but also claim any back. Also he does not retain an accountant inorder to save funds to UKCC.

HMRC's judgement is for the most recent 10 years that they had a view on. UKCC started in 1996 and 2016 is the 20th anniversary.
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JustinHorton
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Re: "SavetheUKCC" petition

Post by JustinHorton » Mon Aug 22, 2016 6:55 pm

John Upham wrote:Also he does not retain an accountant
What?
"Do you play chess?"
"Yes, but I prefer a game with a better chance of cheating."

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Roger Lancaster
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Re: "SavetheUKCC" petition

Post by Roger Lancaster » Mon Aug 22, 2016 6:57 pm

Thanks for the feedback, John, which was much as expected. It's a salutary lesson. Based on this, HMRC will have plucked £300k more or less out of the air (through lack of more accurate data) but, from where I'm standing, this could just as easily have been 2005-2014 rather than 2007-2016 and, if the former, there's potential for them to pursue 2015 and 2016 further which was the danger I wanted to highlight. Maybe it's an illusory danger but I'd recommend anyone to be careful.

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Re: "SavetheUKCC" petition

Post by Roger Lancaster » Mon Aug 22, 2016 6:58 pm

Justin, an accountant would have highlighted the problem at once!

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JustinHorton
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Re: "SavetheUKCC" petition

Post by JustinHorton » Mon Aug 22, 2016 7:06 pm

That may be my point
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"Yes, but I prefer a game with a better chance of cheating."

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Alan Kennedy
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Re: "SavetheUKCC" petition

Post by Alan Kennedy » Mon Aug 22, 2016 7:08 pm

Roger Lancaster wrote:Justin, an accountant would have highlighted the problem at once!
- definitely! :D

John Upham
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Re: "SavetheUKCC" petition

Post by John Upham » Mon Aug 22, 2016 7:10 pm

JustinHorton wrote:
John Upham wrote:Also he does not retain an accountant
What?

I replied in similar fashion when Mike told me this.
Last edited by John Upham on Mon Aug 22, 2016 7:13 pm, edited 1 time in total.
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John Upham
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Re: "SavetheUKCC" petition

Post by John Upham » Mon Aug 22, 2016 7:12 pm

Roger Lancaster wrote:Thanks for the feedback, John, which was much as expected. It's a salutary lesson. Based on this, HMRC will have plucked £300k more or less out of the air (through lack of more accurate data) but, from where I'm standing, this could just as easily have been 2005-2014 rather than 2007-2016 and, if the former, there's potential for them to pursue 2015 and 2016 further which was the danger I wanted to highlight. Maybe it's an illusory danger but I'd recommend anyone to be careful.
Since MJB has been declared bankrupt I would imagine further action would bring limited rewards.
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Nick Grey
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Re: "SavetheUKCC" petition

Post by Nick Grey » Mon Aug 22, 2016 8:01 pm

The petition seems a bit late & yes they will go for the more recent years first particularly where the VAT penalties in law are substantial.
I always though that prizes were so substantial that HMRC were bound to pick this up.

As for a lesson for all are ECF sure that it has it's own house in order?

Jonathan Bryant
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Re: "SavetheUKCC" petition

Post by Jonathan Bryant » Mon Aug 22, 2016 10:32 pm

Roger Lancaster wrote:... opens the door to any other person or organisation able and willing to take over (Mike will probably be under constraints as to what he can and cannot undertake) the project. There is absolutely no reason for the ECF to donate voluntary sums to HMRC (and, in fact, every reason why it should not!) and I would have every confidence in the ECF reaching the same decision.
I’m not sure that the ECF will reach "the same decision" - if only because it doesn’t seem likely to me that the they will be giving the question any thought at all so won’t be reaching any decision.

Why would the ECF even be considering taking over the UKCC? That’s still not clear to me.

Leaving aside that the the ECF as a collective body doesn’t have much of a track record in running similar events (or even not similar ones, the championships aside), what does taking over the UKCC actually mean? If it is Mike Basman trading as the UKCC what’s left once you remove Mike Basman?

Mick Norris
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Re: "SavetheUKCC" petition

Post by Mick Norris » Mon Aug 22, 2016 11:21 pm

John Upham wrote:
JustinHorton wrote:
John Upham wrote:Also he does not retain an accountant
What?

I replied in similar fashion when Mike told me this.
Did you actually tell him that he is an idiot? :roll:
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Roger de Coverly
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Re: "SavetheUKCC" petition

Post by Roger de Coverly » Mon Aug 22, 2016 11:33 pm

Jonathan Bryant wrote:[what does taking over the UKCC actually mean?
I would imagine it would be trying to have an event run with a similar name and structure. There's precedent with the National Schools, which used to be run by the Sunday Times and later the Times without direct BCF involvement.

Earlier in the thread, it was suggested that the ECF's Junior Director wanted the event to continue. You might hope, perhaps in vain, that if the ECF did take it on, that it would charge correctly for the extra costs it would impose on the ECF's Battle office. ECF entry forms invariably state that entry fees include VAT, so no worries there other than increasing the cost by up to 20%.

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