To the annoyance of several Boox contractors accused of being MSCs, HMRC is extending the 36-month standstill agreements it got many of them to sign in early 2024 by a further 72 months.
This key HMRC standstill development, which stands out due to the sheer length of the proposed extension, came just a few days after the tribunal relating to the App Accounting Group T/A Boox concluded.
In fact, HMRC wasted no time, writes David Harmer, a director of Contractor Solutions at Markel Tax. FTT judges retired to consider their judgment in the case of The App Accounting Group Limited (case number TC/2025/00190) on June 23rd — and HMRC's first extension requests reached inboxes just over a week later, on July 2nd. Some ContractorUK readers have called those HMRC standstill extension requests a renewed “extortion threat.”
Key takeaways
- Signing an HMRC standstill agreement is not compulsory, and the 72-month period may be open to negotiation with HMRC depending on individual circumstances.
- Signing does not concede liability, withdraw any existing appeal, or stop you continuing to challenge HMRC's position on the underlying MSC point.
- Declining to sign should not, by itself, be treated as accepting HMRC's figures or as a failure to cooperate — though HMRC says it will pursue protection through the County Court instead.
- If you do sign, treat the 72-month agreement as a new agreement in its own right, not simply an extension to one you may have already signed.
- Interest continues to accrue daily on outstanding amounts regardless of whether you sign — currently at 7.75% (4% above base rate) — until an appeal succeeds or the amount is settled, and contractors have questioned whether that calculation should stand given HMRC's own delays.
- Before signing, check the agreement covers the correct tax years and periods under enquiry, the appeal particulars, and that there are no errors in the document itself.
Why has the standstill period jumped to 72 months?
HMRC is extending its standstill agreements because the current ones are close to expiring — from December 2026 for some contractors to January 2027 for others — at the same time as its own legal window to collect the disputed NICs is running out. Under Section 9 of the Limitation Act 1980, a claim for a NICs debt must be issued within six years. So the issue is timing.
And where that clock is running down — at least in HMRC’s view — standstills are the fix. We’ve previously clarified what these agreements for MSC contractors mean. But for any first-timer contractors, a standstill is an agreement between two parties to a dispute to ‘standstill’ or pause proceedings.
Typically, a standstill is used so that a matter can be investigated. Or it’s so the parties can negotiate. For contractors, a standstill (including with HMRC) gives breathing space to try to resolve a matter, without one party being forced to issue legal proceedings to protect its interest.
Why isn’t a 72-month HMRC standstill going down well with contractors?
Contractors are unhappy because the new 72 months doesn't replace the original 36-month standstill — it stacks on top of it, taking total time under a standstill to as much as nine years. If someone asked you to sign a 36-month standstill, and you obliged, only for them to ask you to sign a further 72-month standstill, you might wonder what else you could have done in that nine years of your life!
Even on its own, a 72-month standstill period is not a short procedural pause; it is a substantial six-year window.
For companies and contractors already dealing with long-running MSC enquiries, a 72-month standstill might feel like the Boox-Churchill Knight tax dispute is being pushed further into the future, rather than being brought closer to resolution.
Why has HMRC picked 72 months, specifically?
HMRC appears to have set the standstill at 72 months because it expects one or more appeals to follow the First-tier Tribunal judgment. With the Boox hearing only just concluded, and the Churchill Knight hearing scheduled for November 2026, HMRC looks like it’s pricing in a dispute that runs well beyond initial expectations — and hopes.
That said, it's not a million miles off from the previous estimated timeline we shared with ContractorUK — that with the likely appeals, we could be getting into 2030 before MSC legislation matters are concluded for both Churchill Knight (CK) and Boox contractors.
We are aware that some contractors regard the 72-month standstill extensions as “premature,” “unreasonable” and “unnecessary.”
Despite the understandable criticism of it, HMRC appears to be taking a prudent approach by seeking a longer standstill period now, rather than having to issue further agreements if the tribunal process is delayed.
Do contractors actually have to sign the HMRC standstill agreement?
No, you don’t. Signing the HMRC standstill agreement is not compulsory. Moreover, the proposed period (72 months) may be open to discussion with HMRC depending on individual circumstances.
Historically, HMRC protected its position on disputed NICs by applying to the County Court for protective action before the relevant deadline expires. If that protection is in place, HMRC may still be able to pursue the NICs and interest if the Boox-CK dispute is ultimately decided in its favour.
What does HMRC’s letter say will happen if you don't sign?
In its communications to Boox contractors, entitled “Action Required - Extending our ‘standstill agreement,’” HMRC states that if you don't sign (or reply), it will “take action through the County Court to protect the amount you owe us.”
However, the courts route is administrative and repetitive. HMRC may need to take action year by year as each period approaches the point of becoming time-barred.
Of course, with a standstill agreement, the intention is to avoid that repeated process by contractually preserving the position for a defined period.
Does signing a 72-month standstill mean accepting HMRC's case?
No, it doesn't mean that you accept HMRC's case — signing does not concede liability.
In other words, signing a standstill agreement is not you agreeing that HMRC is right on the underlying Managed Service Company (MSC) point.
Signing the standstill also does not withdraw any existing appeal that you may have lodged.
Signing this HMRC standstill for the 72-month period (or any other period) also does not prevent you from continuing to challenge HMRC’s position.
Does declining to sign an HMRC standstill count against a contractor?
Declining to sign should not, by itself, be treated as accepting HMRC's figures or as a failure to cooperate.
If a contractor or company chooses not to enter into a standstill agreement, HMRC may decide to protect its position through the court route instead.
For contractors, that court route can create tight response deadlines and additional administration, particularly where more than one tax year is involved — and could expose contractors to HMRC's own court filing costs if HMRC’s MSC appeal is ultimately unsuccessful.
What happens if a contractor decides to sign?
If a contractor signs, the 72-month standstill agreement becomes a new agreement in its own right — not simply an extension of one they may have already signed.
Like any legal agreement, we would advise contractors to check it — to ensure it is accurate.
Does interest continue to accrue while these proceedings are ongoing?
Yes, interest continues to accrue daily on all outstanding amounts until either the contractor succeeds in their appeal — at which point it falls away — or the amount is settled. Interest is a hot topic here: given HMRC's own well-publicised delays in handling these cases, there's a reasonable argument that HMRC should reassess how it applies interest to MSC contractors caught up in that mismanagement.
Can contractors calculate how much interest will be owed after 6 years?
Yes — a rough calculation is possible. HMRC currently sets interest at 4% above base rate, which works out at 7.75% today, though the rate can change annually. To estimate what you owe: take the outstanding amount, multiply by 7.75%, divide by 365 to get the daily interest, then multiply that by the number of days the payment is late.
Since most contractors have multiple tax years under enquiry, the "days late" figure will differ year by year, and, as above, there's a reasonable case that HMRC should reconsider this standard calculation given the delays of its own making.
Should contractors sign the new HMRC standstill agreement?
There's no single right answer — it comes down to individual circumstances.
Contractors are frustrated and angry at the constant delays and HMRC's actions — or inactions — but the reality is that, short of paying HMRC outright, appeals are likely to take years to conclude regardless of whether the standstill is signed, and interest will keep accruing either way.
Signing simply removes the need for County Court formality. Not signing puts pressure on HMRC to continually renew its NIC protections — which may sound appealing — but it's a double-edged sword, since it also means contractors must continually renew their own appeal against collection. Signing takes some of that administrative pressure off both sides while appeals are ongoing. There's no right or wrong answer here; just what each contractor is most comfortable with.
What to specifically check on the HMRC standstill agreement?
Pay particular attention to three things:
- The dates — specifically that the agreement covers the correct tax years and periods which are under enquiry
- The particulars around any subsequent appeal
- That there are no mistakes contained within the agreement itself
What’s significant about HMRC’s move to extend standstill for ‘MSC’ contractors?
HMRC’s move to issue new 72-month standstill agreements is significant because it indicates that HMRC considers that some, if not most, MSC enquiries still have a long way to run.
To sign or not sign the new standstill agreement will be an individual decision for each contractor affected.
Standstill agreements may provide a practical means to avoid repetitive court action, but they are not something that should be simply signed as a matter of process without consideration.
Contractors should also remember this standstill agreement is not the end of the HMRC enquiry. HMRC continues to review some MSC cases and has sought further information from others to revisit its original “best judgement” calculations.
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