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HMRC Preferential Status - Draft Bill

On the 11th July HMRC confirmed the law would be changed to make them a second ranking preferential creditor as part of the Finance Bill 2019/2020

The Government announced this:

From 6 April 2020, when a business enters insolvency, more of the taxes paid in good faith by its employees and customers, and temporarily held by the business, will go to fund public services rather than being distributed to other creditors.

This reform will only apply to taxes collected and held by businesses on behalf of other taxpayers such as:
- VAT
- PAYE Income Tax
- employee National Insurance contributions
- student loan deductions
- Construction Industry Scheme deductions

The rules will remain unchanged for taxes owed by businesses themselves, such as:
- Corporation Tax
- employer National Insurance contributions

There was no restriction on the length of HMRC's claim and there was no protection for Floating Chargeholders. This will apply in both Corporate and Personal insolvency also.

This has caused major controversy and your can read all about the law, the industry opinion and key practical details in our CPD Tap webcast number 111.

If you are not a CPD Tap subscriber please contact us if you are interested at enquiries@ntinsolvency.com. The annual subscription is £995 and you can register three subscribers for that price. 

Posted: 08.08.2019
Tags:  announcement
 


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