In the April budget the Chancellor announced that from 6 April 2020 it proposes that HMRC will once again benefit from a Crown preference.

This means that in an insolvency, HMRC would rank ahead of floating charge holders and unsecured creditors. The taxes collected by the insolvent company from customers and employees on HMRC’s behalf, such as VAT, PAYE income tax and employees’ national insurance contributions.

This is a partial introduction of the Crown preference that was abolished by the Enterprise Act in 2002 when a package of reforms was introduced which aimed to encourage HMRC to look to support rescue options for viable companies rather than winding them up.

There are concerns that this will undermine the current rescue culture and limit the options for viable companies that are struggling.

 

Mary Taylor
Director

Mary began working in insolvency for a national accountancy practice in Glasgow thirty years ago and worked in most divisions of the insolvency department.

She then moved to a smaller firm so she could advance her knowledge on a more hands on basis. She moved back to Leeds in 1987 and commenced working with a small firm of accountants and subsequently made partner.

She left in 1999 to set up her own practice, McCann Taylor.
McCann Taylor became involved with the consumer market both in England and Scotland.

Mary sold McCann Taylor in March 2007 and formed Walsh Taylor to concentrate on helping businesses experiencing financial difficulties.

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