Tax experts have warned that an incoming law which moves HM Revenue & Customs higher up the list of creditors in insolvencies could further damage the economy and cause more companies to go bust.
From December 1, the UK tax authority will be ranked higher in the pecking order used to decide which creditors get paid first when a company fails. The change applies to unpaid VAT, income tax, employees national insurance, student loan deductions and Construction Industry Scheme deductions, but not corporation tax.
The measure, originally announced in budget 2018, is expected to raise an additional 185m annually for the exchequer. But the Chartered Institute of Taxation, a professional body, said it could lead to an increase in insolvencies a…
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