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<p>This reform is designed to ensure that when a business becomes insolvent, more
of the taxes paid in good faith by that business’s employees and customers will go
to fund public services as intended, rather than being distributed to other creditors
such as financial institutions.</p><p>This measure does not include a cap on the age
of tax debts which will be eligible for secondary preferential status, nor an exemption
for existing lending. Either proposal would introduce potential distortions into the
lending market which the Government does not consider to be either fair or proportionate.</p><p>The
Government does not expect this reform to have a significant impact on access to finance,
the cost of borrowing, business rescue support in the UK or the UK’s ranking in the
World Bank’s annual “Doing Business” report.</p><p>Consistent with the Government’s
impact assessment, the independent Office for Budget Responsibility (OBR) did not
make any adjustments to their economic forecast in response to this measure.</p>
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