UK: Budget day - insolvency and corporate announcements

The Government's 2018 Budget was presented yesterday. Copies of all of the budget documents are available here, here and here. A couple of proposals were announced concerning insolvency and corporate law.

The first is the introduction, from 6 April 2020, of a new class of preferential creditor in the context of company insolvency. This new preferential creditor will be HMRC in respect of the taxes collected by companies on behalf of employees and customers.  Further information about this change (including details of the current ranking of creditors) is available here (pdf).

The second is the announcement that with effect from the date on which the Finance Bill 2019-20 receives Royal Assent (as the Finance Act 2020, the Act relating to the 2019 Budget), directors will, in certain cases be jointly and severally liable for company tax liabilities. The budget report (at para. 4.19) states, somewhat vaguely, that this will arise in cases of "...tax avoidance, evasion or phoenixism ... where there is a risk that the company may deliberately enter insolvency".