{"id":1684,"date":"2019-08-28T10:48:43","date_gmt":"2019-08-28T09:48:43","guid":{"rendered":"https:\/\/oreillystewart.com\/?p=1684"},"modified":"2019-08-28T10:48:43","modified_gmt":"2019-08-28T09:48:43","slug":"the-return-of-crown-preference-in-insolvency","status":"publish","type":"post","link":"https:\/\/oreillystewart.com\/the-return-of-crown-preference-in-insolvency\/","title":{"rendered":"The Return of Crown Preference in Insolvency"},"content":{"rendered":"<p>The government on the 11<sup>th<\/sup> July 2019 published their draft Finance Bill for 2019-2020. Contained within same provisions and changes to reinstate HMRC\u2019s status upon insolvency of a business.<\/p>\n<p>The provisions state that HMRC will return to preferential status for debts arising from VAT and any \u201crelevant deduction\u201d to include PAYE, Employee NICs, Student loan deduction and Construction Industry Scheme Deduction. There will also be no carve out for pre-6 April 2020 debts meaning increasing uncertainty for existing floating charge-holders on insolvencies that commence on or after this date regardless of when the lending was made available.<\/p>\n<p>Importantly, also is that the amendment will also apply to personal insolvency, in circumstances where an individual\u2019s debts include VAT or a \u201crelevant deduction\u201d.<\/p>\n<p>At present The Insolvency (Northern Ireland) Order 1989 sets out the order by which creditors are due to be repaid. This reorganisation of the priority list means that HMRC will rank in priority to holders of floating charges and any other non-preferential unsecured creditors. At This Time all HMRC debt is unsecured, however, with the planned changes HMRC will become a secondary preferential creditor. Any claim amount will not be capped and there is no time limit on \u201ccertain tax debts\u201d eligible for preferential status.<\/p>\n<p>So the question results in what does this mean in practice? There is definitely swing in government circles towards the reintroduction of Crown preference in formal insolvency situations. The deep uncertainty for existing floating charge holders on insolvencies that commence on or after this date is clearly a worry for those individuals\/organisations.<\/p>\n<p>Consultation on draft legislation will continue until 5 September 2019 with an implementation date of 6 April 2020.<\/p>\n<p>O\u2019Reilly Stewart can assist in providing advices as to the potential effects of Crown preference and what this means to those providing lending facilities whom it is clear will likely require further protection. Contact our Insolvency team should you wish to discuss how to protect your business.<\/p>\n<p>&nbsp;<\/p>\n<p>Contact Christina at christina.lishman@oreillystewart.com for further advice.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The government on the 11th July 2019 published their draft Finance Bill for 2019-2020. Contained within same provisions and changes to reinstate HMRC\u2019s status upon insolvency of a business. The provisions state that HMRC will return to preferential status for debts arising from VAT and any \u201crelevant deduction\u201d to include PAYE, Employee NICs, Student loan [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"class_list":["post-1684","post","type-post","status-publish","format-standard","hentry","category-uncategorised"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Return of Crown Preference in Insolvency - O\u2019Reilly Stewart Solicitors - Belfast, Northern Ireland, Legal Firm<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/oreillystewart.com\/the-return-of-crown-preference-in-insolvency\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Return of Crown Preference in Insolvency - O\u2019Reilly Stewart Solicitors - Belfast, Northern Ireland, Legal Firm\" \/>\n<meta property=\"og:description\" content=\"The government on the 11th July 2019 published their draft Finance Bill for 2019-2020. 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