Changes to protect tax in insolvency cases

From the 6th of April 2020 there has been a change to policy objectives for when a business enters insolvency.

More of the taxes paid in good faith by its employees and customers, and temporarily held by the business, will go to funding public services instead of being paid out to other creditors of the business.

Below is the list of taxes collected and held by businesses;

This reform will only apply to taxes collected and held by businesses on behalf of other taxpayers

It was in the budget of 2018 that the government had announced that it will be giving HMRC the power to protect the payments of certain tax debts.

However, HMRC will remain as an unsecured creditor for direct taxes on the business, such as Corporation tax and employers National Insurance contributions.