Crammed Down But Not Out: HMRC Successfully Opposes Restructuring Plans

HMRC has recently taken an increased interest in opposing restructuring plans under Part 26A of the Companies Act 2006 ("Part 26A") under which HMRC would otherwise be crammed down. This follows HMRC somewhat regaining its status in 2020 as a secondary preferential creditor in respect of certain taxes in insolvency scenarios (see here and here).

Three recent cases demonstrate this change in approach. Whilst these cases are sure to be of interest from a restructuring and insolvency perspective, the shift in HMRC's approach together with the issues specific to HMRC that were considered by the High Court are also of interest from a taxation perspective.

Houst

In the first case, the High Court sanctioned the proposed restructuring plan in Houst¹ in 2022. Houst was notable for being the first time that such a plan had been used to cram down HMRC. Whilst HMRC did not make submissions to the High Court, the High Court observed that in an email response opposing the