This reform is designed to ensure that when a business becomes insolvent, more of the taxes paid in good faith by that business\u2019s employees and customers will go to fund public services as intended, rather than being distributed to other creditors such as financial institutions.<\/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>
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\u2019s ranking in the World Bank\u2019s annual \u201cDoing Business\u201d report.<\/p>
Consistent with the Government\u2019s impact assessment, the independent Office for Budget Responsibility (OBR) did not make any adjustments to their economic forecast in response to this measure.<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/57", "label" : {"_value" : "Biography information for Lord Young of Cookham"} } , "answeringMemberPrinted" : {"_value" : "Lord Young of Cookham"} , "dateOfAnswer" : {"_value" : "2019-08-06", "_datatype" : "dateTime"} , "groupedQuestionUIN" : [{"_value" : "HL17385"} , {"_value" : "HL17386"} , {"_value" : "HL17387"} ], "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "questionFirstAnswered" : [{"_value" : "2019-08-06T13:34:00.673Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "14"} , "answeringDeptShortName" : {"_value" : "Treasury"} , "answeringDeptSortName" : {"_value" : "Treasury"} , "date" : {"_value" : "2019-07-23", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "Insolvency"} , "houseId" : {"_value" : "2"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25277", "prefLabel" : {"_value" : "House of Lords"} } ], "questionText" : "To ask Her Majesty's Government what assessment they have made of the impact that the proposal to make HMRC a secondary preferential creditor in insolvencies may have on business rescue support in the UK from April 2020.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/1567", "label" : {"_value" : "Biography information for Baroness Burt of Solihull"} } , "tablingMemberPrinted" : [{"_value" : "Baroness Burt of Solihull"} ], "uin" : "HL17384"} , {"_about" : "http://data.parliament.uk/resources/1139917", "AnsweringBody" : [{"_value" : "Department for Business, Energy and Industrial Strategy"} ], "answer" : {"_about" : "http://data.parliament.uk/resources/1139917/answer", "answerText" : {"_value" : "
The Government is committed to helping people make good financial decisions, establishing the Money and Pensions Service to provide free support and guidance on all aspects of people\u2019s financial lives. It has increased funding for the provision of debt advice in each of the past two years rising to almost £56million this year in England, which will deliver 560,000 debt advice sessions.<\/p>
<\/p>
Where individuals do get into problem debt the government has announced it will deliver its manifesto commitment for a Breathing Space scheme, which will protect debtors from creditor action, help them get professional advice on their debt problems, and enable them to find an appropriate and sustainable debt solution.<\/p>
<\/p>
The regional personal insolvency rate increased in 2018, driven mainly by individual voluntary arrangements (IVAs), with all regions following the national trend.<\/p>
<\/p>
Historically, males had a higher rate of insolvencies per 10,000 adults than females, but the gender gap noticeably narrowed from 2009 onwards and, by 2014, females began to have higher insolvency rates than males. This change coincided with a decline in the number of bankruptcies (where males have a higher rate of insolvency), the introduction and growth in the number of debt relief orders (where the rate for women is higher), and the narrowing and subsequent reversal of the gender gap for IVAs.<\/p>
<\/p>
The latest data providing a breakdown of individual insolvencies can be found in Individual Insolvencies by Location, Age and Gender, England and Wales, 2018; released on 17th July 2019 on the GOV.UK website.<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/4487", "label" : {"_value" : "Biography information for Kelly Tolhurst"} } , "answeringMemberConstituency" : {"_value" : "Rochester and Strood"} , "answeringMemberPrinted" : {"_value" : "Kelly Tolhurst"} , "dateOfAnswer" : {"_value" : "2019-07-23", "_datatype" : "dateTime"} , "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "previousAnswerVersion" : {"_about" : "http://data.parliament.uk/resources/1139917/answer/previousversion/130462", "answeringMember" : {"_about" : "http://data.parliament.uk/members/4487", "label" : {"_value" : "Biography information for Kelly Tolhurst"} } , "answeringMemberConstituency" : {"_value" : "Rochester and Strood"} , "answeringMemberPrinted" : {"_value" : "Kelly Tolhurst"} } , "questionFirstAnswered" : [{"_value" : "2019-07-23T15:12:07.45Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "201"} , "answeringDeptShortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "answeringDeptSortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "date" : {"_value" : "2019-07-17", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "Insolvency"} , "houseId" : {"_value" : "1"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25259", "prefLabel" : {"_value" : "House of Commons"} } ], "questionText" : "To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to prevent insolvency; and what assessment he has made of the disparity in insolvency rates between (a) regions of England and Wales and (b) men and women.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/298", "label" : {"_value" : "Biography information for Steve McCabe"} } , "tablingMemberConstituency" : {"_value" : "Birmingham, Selly Oak"} , "tablingMemberPrinted" : [{"_value" : "Steve McCabe"} ], "uin" : "278351"} , {"_about" : "http://data.parliament.uk/resources/1130841", "AnsweringBody" : [{"_value" : "Department for Business, Energy and Industrial Strategy"} ], "answer" : {"_about" : "http://data.parliament.uk/resources/1130841/answer", "answerText" : {"_value" : "
In 2018, the Government published detailed proposals to reform corporate insolvency laws including strengthening the powers available to insolvency office-holders to challenge transactions and take recovery action where value has been extracted from a company as it approaches insolvency. The Government remains committed to introduce these changes as soon as Parliamentary time allows.<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/2616", "label" : {"_value" : "Biography information for Lord Henley"} } , "answeringMemberPrinted" : {"_value" : "Lord Henley"} , "dateOfAnswer" : {"_value" : "2019-06-17", "_datatype" : "dateTime"} , "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "questionFirstAnswered" : [{"_value" : "2019-06-17T12:31:37.757Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "201"} , "answeringDeptShortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "answeringDeptSortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "date" : {"_value" : "2019-06-10", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "Insolvency"} , "houseId" : {"_value" : "2"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25277", "prefLabel" : {"_value" : "House of Lords"} } ], "questionText" : "To ask Her Majesty's Government, further to the Written Answer by Lord Henley on 9 May (HL15286), whether they intend to prioritise strengthening the powers available to insolvency practitioners to take recovery action where value has been extracted from a company prior to insolvency and to require any such related funds to be returned.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/3869", "label" : {"_value" : "Biography information for Lord Myners"} } , "tablingMemberPrinted" : [{"_value" : "Lord Myners"} ], "uin" : "HL16208"} , {"_about" : "http://data.parliament.uk/resources/1126305", "AnsweringBody" : [{"_value" : "Treasury"} ], "answer" : {"_about" : "http://data.parliament.uk/resources/1126305/answer", "answerText" : {"_value" : "
The estimate is the tax recovered from insolvencies that HM Revenue and Customs (HMRC) would not otherwise have collected before the policy was implemented. Adjustments were made for tax and payment timing.<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/57", "label" : {"_value" : "Biography information for Lord Young of Cookham"} } , "answeringMemberPrinted" : {"_value" : "Lord Young of Cookham"} , "dateOfAnswer" : {"_value" : "2019-05-22", "_datatype" : "dateTime"} , "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "questionFirstAnswered" : [{"_value" : "2019-05-22T16:21:03.407Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "14"} , "answeringDeptShortName" : {"_value" : "Treasury"} , "answeringDeptSortName" : {"_value" : "Treasury"} , "date" : {"_value" : "2019-05-13", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "Insolvency"} , "houseId" : {"_value" : "2"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25277", "prefLabel" : {"_value" : "House of Lords"} } ], "questionText" : "To ask Her Majesty's Government what was the basis for their estimate in the consultation by HMRC Protecting your taxes in insolvency, published on 26 February, that the reintroduction of preferential status for any Crown creditor would yield £185 million per annum in additional tax revenue.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/4159", "label" : {"_value" : "Biography information for Baroness Hayter of Kentish Town"} } , "tablingMemberPrinted" : [{"_value" : "Baroness Hayter of Kentish Town"} ], "uin" : "HL15665"} , {"_about" : "http://data.parliament.uk/resources/1126306", "AnsweringBody" : [{"_value" : "Treasury"} ], "answer" : {"_about" : "http://data.parliament.uk/resources/1126306/answer", "answerText" : {"_value" : "
The \u2018Protecting your taxes in insolvency\u2019 proposals take into account lost government revenue resulting from other taxpayers suffering additional bad debts due to the priority payment of HMRC.<\/p>
<\/p>
Lending against fixed assets will not be impacted by this measure, but lending against floating assets will be impacted, as HMRC will move above secured creditors with floating charges in insolvencies.<\/p>
<\/p>
At Budget 2018, the independent OBR chose not to make any adjustments to their economic forecast in response to this measure.<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/57", "label" : {"_value" : "Biography information for Lord Young of Cookham"} } , "answeringMemberPrinted" : {"_value" : "Lord Young of Cookham"} , "dateOfAnswer" : {"_value" : "2019-05-22", "_datatype" : "dateTime"} , "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "questionFirstAnswered" : [{"_value" : "2019-05-22T16:22:56.03Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "14"} , "answeringDeptShortName" : {"_value" : "Treasury"} , "answeringDeptSortName" : {"_value" : "Treasury"} , "date" : {"_value" : "2019-05-13", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "Insolvency"} , "houseId" : {"_value" : "2"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25277", "prefLabel" : {"_value" : "House of Lords"} } ], "questionText" : "To ask Her Majesty's Government whether the proposals in the consultation by HMRC Protecting your taxes in insolvency, published on 26 February, to reintroduce preferential status for any Crown creditor takes into account lost Government revenue resulting from other taxpayers suffering additional bad debts due to the priority payment of HMRC, and any consequential loss to the economy resulting other taxpayers themselves becoming insolvent due to an increased burden of bad debt; and what assessment, if any, they have made of the impact of that change on lending.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/4159", "label" : {"_value" : "Biography information for Baroness Hayter of Kentish Town"} } , "tablingMemberPrinted" : [{"_value" : "Baroness Hayter of Kentish Town"} ], "uin" : "HL15666"} , {"_about" : "http://data.parliament.uk/resources/1122701", "AnsweringBody" : [{"_value" : "Department for Business, Energy and Industrial Strategy"} ], "answer" : {"_about" : "http://data.parliament.uk/resources/1122701/answer", "answerText" : {"_value" : "
In August 2018 the Government published its response to the 2016 \u2018Review of the Corporate Insolvency Framework\u2019 consultation and 2018 \u2018Insolvency and Corporate Governance\u2019 consultation. The Government outlined in its response its intention to proceed with a comprehensive package of reforms aimed at improving the prospects of company rescue for financially distressed companies, while improving corporate governance to ensure those affected by a company\u2019s financial difficulties are treated fairly.<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/4487", "label" : {"_value" : "Biography information for Kelly Tolhurst"} } , "answeringMemberConstituency" : {"_value" : "Rochester and Strood"} , "answeringMemberPrinted" : {"_value" : "Kelly Tolhurst"} , "dateOfAnswer" : {"_value" : "2019-05-02", "_datatype" : "dateTime"} , "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "questionFirstAnswered" : [{"_value" : "2019-05-02T12:59:45.29Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "201"} , "answeringDeptShortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "answeringDeptSortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "date" : {"_value" : "2019-04-24", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "Insolvency"} , "houseId" : {"_value" : "1"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25259", "prefLabel" : {"_value" : "House of Commons"} } ], "questionText" : "To ask the Secretary of State for Business, Energy and Industrial Strategy, what progress his Department has made in progressing its proposed reforms to the corporate insolvency framework; and when he plans to bring forward legislative proposals on implementing those reforms.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/4122", "label" : {"_value" : "Biography information for Alex Cunningham"} } , "tablingMemberConstituency" : {"_value" : "Stockton North"} , "tablingMemberPrinted" : [{"_value" : "Alex Cunningham"} ], "uin" : "247038"} , {"_about" : "http://data.parliament.uk/resources/1122702", "AnsweringBody" : [{"_value" : "Department for Business, Energy and Industrial Strategy"} ], "answer" : {"_about" : "http://data.parliament.uk/resources/1122702/answer", "answerText" : {"_value" : "
The Government regularly consults with and discusses matters of policy with a wide range of stakeholders in order to deliver effective, evidence-based reforms. This reflects the Government\u2019s commitment to open and consultative policy making.<\/p>
<\/p>
In August 2018 the Government published its response to the 2016 \u2018Review of the Corporate Insolvency Framework\u2019 consultation and 2018 \u2018Insolvency and Corporate Governance\u2019 consultation. The Government outlined in its response its intention to proceed with a comprehensive package of reforms aimed at improving the prospects of company rescue for financially distressed companies, while improving corporate governance to ensure those affected by a company\u2019s financial difficulties are treated fairly.<\/p>
<\/p>
Since publication of the response, officials have continued to consult with a range of interested parties, including representatives from the insolvency and restructuring profession, on the detail of the proposed reforms.<\/p>
<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/4487", "label" : {"_value" : "Biography information for Kelly Tolhurst"} } , "answeringMemberConstituency" : {"_value" : "Rochester and Strood"} , "answeringMemberPrinted" : {"_value" : "Kelly Tolhurst"} , "dateOfAnswer" : {"_value" : "2019-05-01", "_datatype" : "dateTime"} , "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "questionFirstAnswered" : [{"_value" : "2019-05-01T16:03:59.92Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "201"} , "answeringDeptShortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "answeringDeptSortName" : {"_value" : "Business, Energy and Industrial Strategy"} , "date" : {"_value" : "2019-04-24", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "Insolvency"} , "houseId" : {"_value" : "1"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25259", "prefLabel" : {"_value" : "House of Commons"} } ], "questionText" : "To ask the Secretary of State for Business, Energy and Industrial Strategy, what public consultation his Department is undertaking with the insolvency and restructuring profession on his Department\u2019s proposed reforms of the corporate insolvency framework.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/4122", "label" : {"_value" : "Biography information for Alex Cunningham"} } , "tablingMemberConstituency" : {"_value" : "Stockton North"} , "tablingMemberPrinted" : [{"_value" : "Alex Cunningham"} ], "uin" : "247039"} , {"_about" : "http://data.parliament.uk/resources/1121367", "AnsweringBody" : [{"_value" : "Treasury"} ], "answer" : {"_about" : "http://data.parliament.uk/resources/1121367/answer", "answerText" : {"_value" : "
In line with the Government\u2019s commitment to open and consultative policy making, the Government regularly engages with a wide variety of stakeholders to ensure policy changes are well informed and based upon the best available evidence.<\/p>
<\/p>
The Government is currently consulting on the detailed policy design for this measure to ensure the changes work as intended. The consultation closes on 27 May and the Government is encouraging financial services businesses, lenders and insolvency practitioners to respond. The Government has already held discussions with UK Finance (the representative body for the banking and finance industry), the Insolvency Service, and R3 (the representative body for insolvency practitioners) as part of this consultation process.<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/3935", "label" : {"_value" : "Biography information for Mel Stride"} } , "answeringMemberConstituency" : {"_value" : "Central Devon"} , "answeringMemberPrinted" : {"_value" : "Mel Stride"} , "dateOfAnswer" : {"_value" : "2019-04-23", "_datatype" : "dateTime"} , "groupedQuestionUIN" : {"_value" : "244077"} , "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "questionFirstAnswered" : [{"_value" : "2019-04-23T15:41:25.253Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "14"} , "answeringDeptShortName" : {"_value" : "Treasury"} , "answeringDeptSortName" : {"_value" : "Treasury"} , "date" : {"_value" : "2019-04-11", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "Insolvency"} , "houseId" : {"_value" : "1"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25259", "prefLabel" : {"_value" : "House of Commons"} } ], "questionText" : "To ask the Chancellor of the Exchequer, whether the Government has consulted with representatives of (a) lenders, (b) business, (c) consumer groups and (d) other relevant stakeholders on his decision at the 2018 Budget to make HMRC a secondary preferential creditor in corporate insolvencies (i) before and (ii) after that decision was made.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/4069", "label" : {"_value" : "Biography information for Peter Aldous"} } , "tablingMemberConstituency" : {"_value" : "Waveney"} , "tablingMemberPrinted" : [{"_value" : "Peter Aldous"} ], "uin" : "244076"} , {"_about" : "http://data.parliament.uk/resources/1121368", "AnsweringBody" : [{"_value" : "Treasury"} ], "answer" : {"_about" : "http://data.parliament.uk/resources/1121368/answer", "answerText" : {"_value" : "
In line with the Government\u2019s commitment to open and consultative policy making, the Government regularly engages with a wide variety of stakeholders to ensure policy changes are well informed and based upon the best available evidence.<\/p>
<\/p>
The Government is currently consulting on the detailed policy design for this measure to ensure the changes work as intended. The consultation closes on 27 May and the Government is encouraging financial services businesses, lenders and insolvency practitioners to respond. The Government has already held discussions with UK Finance (the representative body for the banking and finance industry), the Insolvency Service, and R3 (the representative body for insolvency practitioners) as part of this consultation process.<\/p>"} , "answeringMember" : {"_about" : "http://data.parliament.uk/members/3935", "label" : {"_value" : "Biography information for Mel Stride"} } , "answeringMemberConstituency" : {"_value" : "Central Devon"} , "answeringMemberPrinted" : {"_value" : "Mel Stride"} , "dateOfAnswer" : {"_value" : "2019-04-23", "_datatype" : "dateTime"} , "groupedQuestionUIN" : {"_value" : "244076"} , "isMinisterialCorrection" : {"_value" : "false", "_datatype" : "boolean"} , "questionFirstAnswered" : [{"_value" : "2019-04-23T15:41:25.3Z", "_datatype" : "dateTime"} ]} , "answeringDeptId" : {"_value" : "14"} , "answeringDeptShortName" : {"_value" : "Treasury"} , "answeringDeptSortName" : {"_value" : "Treasury"} , "date" : {"_value" : "2019-04-11", "_datatype" : "dateTime"} , "hansardHeading" : {"_value" : "Insolvency"} , "houseId" : {"_value" : "1"} , "legislature" : [{"_about" : "http://data.parliament.uk/terms/25259", "prefLabel" : {"_value" : "House of Commons"} } ], "questionText" : "To ask the Chancellor of the Exchequer, whether (a) HMRC and (b) his Department consulted with the Insolvency Service (a) before and (b) after his decision at the 2018 Budget to make HMRC a secondary preferential creditor in insolvencies.", "registeredInterest" : {"_value" : "false", "_datatype" : "boolean"} , "tablingMember" : {"_about" : "http://data.parliament.uk/members/4069", "label" : {"_value" : "Biography information for Peter Aldous"} } , "tablingMemberConstituency" : {"_value" : "Waveney"} , "tablingMemberPrinted" : [{"_value" : "Peter Aldous"} ], "uin" : "244077"} , {"_about" : "http://data.parliament.uk/resources/1050587", "AnsweringBody" : [{"_value" : "Department for Business, Energy and Industrial Strategy"} ], "answer" : {"_about" : "http://data.parliament.uk/resources/1050587/answer", "answerText" : {"_value" : "
The Insolvency Service produces official statistics covering individual insolvencies by local authority area for each calendar year for England and Wales: https://www.gov.uk/government/statistics/individual-insolvencies-by-location-age-and-gender-england-and-wales-2017<\/a><\/p>