Wednesday, November 18, 2020
Executive Summary
On a UK companys insolvency, the UK tax authority (HMRC) will become a preferential creditor in respect of certain unpaid taxes (Crown Preference) with effect from 1 December 2020. Despite lobbying against the move (including in light of the COVID-19 pandemic), the UK government has persisted with the change, perhaps in an attempt to shore up its tax take.
TheReformin Context
Prior to the Enterprise Act 2002 (Enterprise Act), HMRC ranked ahead of floating charge security holders (such as banks) in respect of unpaid taxes of insolvent companies. The Enterprise Act then removed this preferential status. Currently and prior to 1 December 2020, HMRC is an ordinary unsecured creditor in a compan…
Read the full article at: https://www.natlawreview.com/article/covid-19-uk-insolvency-reform-crown-preference-returns-1-december-2020
