A1.607 General rule

Priority for payment of tax

A1.607 General rule

From 1 December 2020, HMRC is a secondary preferential creditor in insolvency proceedings in relation to VAT, PAYE income tax, employee NIC, student loan deductions, and construction industry scheme (CIS) deductions1. Regulations2 provide for the priority of these HMRC debts on insolvency, which means that those debts can be paid before amounts owed to other creditors. HMRC will ensure that claims for outstanding debts which it sends to insolvency practitioners clearly reflect which elements are preferential and which are not. If a practitioner has not received a claim but considers an

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