Reforms to HMRC’s preferential creditor status will not restore Crown Preference. 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. Since reforms were announced at Budget 2018, officials and interested parties have maintained productive and fruitful discussion. The Government held a formal consultation between February and May 2019, seeking views from businesses, lenders and insolvency practitioners. Having balanced the interests of taxpayers, the Exchequer and other creditors, the Government believes these reforms take a fair and proportionate approach. This measure was legislated for in Finance Act 2020, to take effect from 1 December.