The proposals
HM Revenue and Customs (HMRC) is consulting on a proposal to make HMRC a secondary preferential creditor for certain tax debts paid by employees and customers on the insolvency of a business.
These tax debts include:
- PAYE
- employee national insurance contributions
- VAT
Our view
We are concerned that the proposals would:
- shift the burden of bad debt to private creditors
- disrupt insolvency processes
- increase financing costs
- take the UK out of step with emerging international norms
What this means for solicitors
Solicitors who advise on restructurings and insolvency law would be affected by these proposals.
The proposals would also have an impact on those who work on a range of commercial and financing matters.
Next steps
We urge the government to reconsider its proposed next step, which is to introduce legislation to implement this proposal in Finance Bill 2019/2020.
The consultation closes on 27 May.
Read the consultation on the GOV.UK website