Is the UK’s HMRC short sighted in restoring Crown preference at a time when many SME’s and their lenders are already struggling?
By Tyrone Courtman, Partner, RSM Restructuring Advisory LLP
03 December, 2020
From 1 December 2020, arrears of crown debts (unpaid VAT, PAYE, employee national insurance contributions and CIS deductions) will obtain secondary preferential status. This means they will rank ahead of some debts secured by lenders, reducing cashflow for businesses and increasing personal exposure for guarantors.
What’s proposed?
The Finance Bill 2019-21 recently received Royal Assent and HMRC will again become a secondary preferential creditor. Many involved in restructuring and insolvency have long campaigned against this, fearing adverse consequences for businesses, their lenders and their owners.
Protecting your taxes in Insolvency?
The Finance Bill 2019-21 recently received Royal Assent and HMRC will again become a secondary preferential creditor. Many involved in restructuring and insolvency have long campaigned against this, fearing adverse consequences for businesses, their lenders and their owners.
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