Key tax consequences of an insolvent liquidation
Produced in partnership with Julia Fox of Deloitte LLP and Anthony Davis
Key tax consequences of an insolvent liquidation

The following Tax guidance note Produced in partnership with Julia Fox of Deloitte LLP and Anthony Davis provides comprehensive and up to date legal information covering:

  • Key tax consequences of an insolvent liquidation
  • Change in priority of tax liabilities in an insolvent liquidation
  • Special accounting periods for companies in insolvent liquidation
  • Rules on accounting periods and their effect on the use of tax losses
  • Beneficial ownership
  • Groups for tax purposes
  • Application of control tests to a company in liquidation
  • Cessation of trade
  • Personal liability
  • Corporation tax rates
  • more

FORTHCOMING CHANGES relating to insolvency and tax: Finance Bill 2019–20 introduces provisions where:

  1. with effect for business insolvencies that commence on or after 6 April 2020, HMRC becomes a secondary preferential unsecured creditor (moving up from a non-preferential unsecured creditor) in respect of the following taxes (and regardless of when the tax debt was incurred): income tax, employee National Insurance contributions and student loan repayments collected through PAYE and construction industry scheme deductions and VAT and any penalties or interest arising from such taxes (for more information, see News Analyses: Draft Finance Bill 2019-20—changes to protect tax in insolvency with HMRC to become preferential creditor and Draft Finance Bill 2019–20—Tax analysis—Changes to protect tax in insolvency—HMRC to become preferential creditor), and

  2. with effect for tax periods ending, and to facilitation penalties determined and issued, on or after the date of Royal Assent, HMRC can issue joint liability notices to make directors and other persons involved in tax avoidance, evasion or repeated corporate insolvencies jointly and severally liable for the tax liabilities of a company (or to make members or shadow members jointly liable for the tax liabilities of a limited liability partnership (LLP)) where the company (or LLP) is subject to, or there is a serious possibility of it being subject to, an insolvency procedure (for more information, see News