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<p>The Government’s reforms to make HMRC a secondary preferential creditor for certain
tax debts (otherwise known as Protecting Your Taxes in Insolvency) came into effect
across the UK on 1 December 2020.</p><p> </p><p>The Government has taken a proportionate
approach, applying changes only to taxes paid in good faith by employees and customers,
but held temporarily by the business, including Pay as You Earn (PAYE) Income Tax
and VAT. The reforms do not reintroduce crown preference, which applied more broadly
across all tax debts.</p><p> </p><p>The Government undertook careful work to assess
the impact of the reforms ahead of announcement and implementation. As with all tax
policy changes, the Government published this assessment in a tax information and
impact note which can be found on gov.uk.[1]</p><p> </p><p>[1] Full web-link: <a href="https://www.gov.uk/government/publications/changes-to-protect-tax-in-insolvency-cases"
target="_blank">https://www.gov.uk/government/publications/changes-to-protect-tax-in-insolvency-cases</a>.</p>
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