Insolvency

(asked on 30th November 2020) - View Source

Question to the HM Treasury:

To ask Her Majesty's Government whether they completed an economic impact assessment for the reintroduction of the Crown preference for insolvency.


Answered by
 Portrait
Lord Agnew of Oulton
This question was answered on 14th December 2020

The Government’s reforms to make HMRC a secondary preferential creditor for certain tax debts (otherwise known as Protecting Your Taxes in Insolvency) came into effect across the UK on 1 December 2020.

The Government has taken a proportionate approach, applying changes only to taxes paid in good faith by employees and customers, but held temporarily by the business, including Pay as You Earn (PAYE) Income Tax and VAT. The reforms do not reintroduce crown preference, which applied more broadly across all tax debts.

The Government undertook careful work to assess the impact of the reforms ahead of announcement and implementation. As with all tax policy changes, the Government published this assessment in a tax information and impact note which can be found on gov.uk.[1]

[1] Full web-link: https://www.gov.uk/government/publications/changes-to-protect-tax-in-insolvency-cases.

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