Cheltenham: 01242 260066 | Bristol: 0117 933 5710 | Email accountants@mitchells.org

Experts warn Chancellor over insolvency debts

20 Sep 2019

Prioritising HMRC over other creditors in insolvencies will have a 'negative impact on the UK's economic growth', experts have warned Chancellor Sajid Javid.

The warning was issued in a letter from 11 business organisations and insolvency experts to the Chancellor.

Signatories of the letter include the Institute of Chartered Accountants in England and Wales (ICAEW), the Institute of Chartered Accountants of Scotland (ICAS), the Insolvency Practitioners Association (IPA) and the City of London Law Society (CLLS).

The letter says that the proposed change will make it more difficult to rescue businesses. According to the organisations, it will also reduce access to finance for small businesses, increase the harm done to other businesses in insolvencies and could ultimately result in losses to the Exchequer.

Writing in the letter, the organisations said: 'While we understand that the government wishes to increase the value of taxes repaid in the event of insolvency, there is a serious risk that the wider costs of the government's approach will outweigh any expected benefit.

'This proposed policy would reverse successive governments' attempts to encourage a culture of business rescue in the UK, and would undermine the government's recent work to strengthen the UK's insolvency and restructuring framework.'

The proposal, which was announced in the 2018 Budget and is now included in the draft Finance Bill, will see a change implemented from 6 April 2020. This would entail taxes, including the VAT, Pay as You Earn (PAYE) and employee national insurance contributions (NICs) owed by an insolvent company to be paid to HMRC ahead of floating charge holders and unsecured creditors.

Try a site search Tax returns, budget, pension, rates and allowances...

Contact details

Cheltenham Office: 01242 260066
Bristol Office: 0117 933 5710

Company Registration No: 4161638
Company Registered in England and Wales.
Company details
Mitchell Glanville Limited
Registered Address: 41 Rodney Road, Cheltenham, Gloucestershire GL50 1HX

Bristol Office: The Garden Suite, 23 Westfield Park, Redland, Bristol BS6 6LT
Mitchell Glanville Limited regulated by the Institute of Chartered Accountants in England and Wales
Mitchell Glanville (Bristol) Limited regulated by the Association of Chartered Certified Accountants

© 2020 Mitchells Chartered Accountants. All rights reserved. We use cookies on this website, you can find more information about cookies here.