UK: Finance Bill 2019-20 - draft published - insolvency law provisions

HM Treasury has published, for consultation purposes, a draft of the Finance Bill 2019-2020 together with supporting guidance: see here. Drawing most attention in the media is the new Digital Services Tax but the Bill also contains measures to change the priority of HMRC in insolvency and to address tax abuse involving insolvency.

With regard to the priority of HMRC in insolvency, it is proposed that HMRC should become a secondary preferential creditor in respect of certain debts. Further information about this change is available in a policy paper; the draft legislation and accompanying explanatory note are available, respectively, here (pdf) and here (pdf).

The Bill also contains a provision that will provide HMRC with a power to make directors (including shadow directors) jointly and severally liable for a company's tax liabilities, in a limited range of circumstances linked to avoidance, evasion and insolvency. Further information about this new power is available in a policy paper and the draft legislation and accompanying explanatory note are available, respectively, here (pdf) and here (pdf).