In the distribution of a bankrupt's property, preferential debts are those debts which are paid in priority to all other, subject to provision for the costs of administration.
From 1 December 2020 HMRC has a measure of priority for debts owed to it in an insolvency in relation to VAT, PAYE income tax, employee NIC, student loan deductions, and construction industry scheme (CIS) deductions only1. There is no time limit on the age of the debt which falls within these rules.
The rationale for this rule applying only to these taxes is that, at least in the eyes of HMRC, these are taxes which are paid by customers and employees and are only temporarily held by a company. Taxes which are the liability of the company itself, principally corporation tax and employers' NIC are not included within this rule and in an insolvency these taxes will still rank equally with other unsecured