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ARTICLE · 23 MARCH 2020

Crown Preference To Return (In Part), But It's Slightly Delayed

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The UK Government announced in this week's Budget that, in all insolvencies commencing on or after 1 December 2020, the UK tax authorities will move up the creditor hierarchy in English ...

United KingdomInsolvency/Bankruptcy/Re-Structuring
Devi Shah
Devi Shah
Jessica Walker
Jessica Walker
Alexandra Wood
Alexandra Wood
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The UK Government announced in this week's Budget that, in all insolvencies commencing on or after 1 December 2020, the UK tax authorities will move up the creditor hierarchy in English insolvency proceedings in respect of certain taxes paid by employees and customers.  As a result, the debts due to the UK tax authorities in respect of taxes covered by the reform will rank ahead of floating charge realisations and unsecured claims, and will reduce them accordingly.  The reform will affect recoveries under both new and existing floating charges.

This change was originally announced in 2018, with draft legislation published in 2019 and had been due to come into force from 6 April 2020.1

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