Insolvency hierarchy changes

From 6 April 2020, insolvency legislation will be amended to move HMRC up the creditor hierarchy for the distribution of assets in the event of insolvency by making HMRC a secondary preferential creditor in respect of certain tax debts held by a business (this includes individuals and partnerships) on behalf of their customers and employees. This includes VAT, PAYE income tax and CIS deductions.

The rules will remain unchanged for taxes owed by businesses themselves, such as corporation tax and employer National Insurance contributions.

In addition, directors and other persons connected to companies subject to an insolvency procedure will be made jointly and severally liable for amounts payable to HMRC by the company in certain circumstances. This will apply mainly in cases where the company has engaged in avoidance, evasion or 'phoenixism'.

Internet link: GOV.UK insolvency

About us

Cheshams Accountants, Accountants in Hounslow was established in 2003 and today, we continue to build on our enviable reputation for providing excellent advice and first class service to our business and personal clients alike. We have many clients in the local community and service businesses, small and large.

Contact details

0208 572 9955

Cheshams Accountants Ltd, Suite 16, Neals Corner, 2 Bath Road, Hounslow, Middlesex TW3 3HJ

Registered in England and Wales.
Company registration number: 04832946
Incorporated: 1 July 2003

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