From 6 April 2020, insolvency legislation will be amended to move HMRC up the creditor hierarchy for the distribution of assets in the event of insolvency by making HMRC a secondary preferential creditor in respect of certain tax debts held by a business (this includes individuals and partnerships) on behalf of their customers and employees. This includes VAT, PAYE income tax and CIS deductions.
The rules will remain unchanged for taxes owed by businesses themselves, such as corporation tax and employer National Insurance contributions.
In addition, directors and other persons connected to companies subject to an insolvency procedure will be made jointly and severally liable for amounts payable to HMRC by the company in certain circumstances. This will apply mainly in cases where the company has engaged in avoidance, evasion or ‘phoenixism’.
Internet link: GOV.UK insolvency
Get in contact with us for more information and assistance on all your accountancy and business needs.
Our accountancy services include:
- Annual Accounts Preparation
- Bookkeeping and VAT
- Payroll and CIS
- Personal Tax: Self Assessment
- Tax Investigation Protection
- Tax Planning and Specialist Tax work
Our business consultancy services include: