UK Budget 2020 - HMRC’s standing in insolvency

Mar 16, 2020

 

 As announced at Budget 2018, the Government will change the rules  to make HMRC a secondary preferential creditor for certain tax debts. However, the Budget delayed the commencement date of this measure from 6 April 2020 to 1 December 2020. It also extends this measure to include Northern Ireland.

This reform will only apply to taxes collected and held by businesses on behalf of other taxpayers (VAT, PAYE income tax, employee NICs and CIS deductions). The rules unchanged for taxes owed by businesses themselves, such as corporation tax and employer NICs, remain unchanged. This legislation will be introduced in Finance Bill 2020.