Prioritising HMRC over other creditors in insolvencies will have a ‘negative impact on the UK’s economic growth’, experts have warned Chancellor of the Exchequer 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, the Institute of Chartered Accountants of Scotland, the Insolvency Practitioners Association and the City of London Law Society.
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), CIS and employee national insurance contributions (NICs) owed by an insolvent company to be paid to HMRC ahead of floating charge holders and unsecured creditors.
Robinsons London Accountants – accounting done differently
At Robinsons we work hard to understand, communicate, interact, engage and, above all, to connect with each and every one of our clients – from entrepreneurs to established businesses, from every area of London and from every sector you can imagine.
MEET THE TEAM to find out more about Joseph, Richard and Matthew.
For us, it’s all about building long-term relationships and really getting to know what makes you tick and what your goals are. We do all this using the latest accounting software. We also have great packages to help start-ups. Remember, we care about your business, not just your accounts.
Experts warning over insolvency debts
Experts warning over insolvency debts
Prioritising HMRC over other creditors in insolvencies will have a ‘negative impact on the UK’s economic growth’, experts have warned Chancellor of the Exchequer 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, the Institute of Chartered Accountants of Scotland, the Insolvency Practitioners Association and the City of London Law Society.
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), CIS and employee national insurance contributions (NICs) owed by an insolvent company to be paid to HMRC ahead of floating charge holders and unsecured creditors.
Internet link: Economia news
Robinsons London Accountants – accounting done differently
At Robinsons we work hard to understand, communicate, interact, engage and, above all, to connect with each and every one of our clients – from entrepreneurs to established businesses, from every area of London and from every sector you can imagine.
MEET THE TEAM to find out more about Joseph, Richard and Matthew.
For us, it’s all about building long-term relationships and really getting to know what makes you tick and what your goals are. We do all this using the latest accounting software. We also have great packages to help start-ups. Remember, we care about your business, not just your accounts.
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