Today the Government published draft provisions for inclusion in
the Finance Bill which will amend the Insolvency Act 1986 and grant
HMRC preferential status on insolvency. A status that was removed
in 2003 but which will be re-instated (in part) from 6 April
2020.
Despite huge concern from the lending market, voiced in
responses to the Government's consultation on this measure, the
only material change we can see is confirmation that preferential
status will not apply to insolvency proceedings commenced before 6
April 2020.
Unfortunately for businesses and lenders, this does not address
real concern about the impact of this change on existing facilities
and future lending.
The Government's news announcement confirms that the draft
legislation is subject to consultation which concludes on 5
September 2019. However there has already been
consultation on the proposal and concerns from the lending
community have not been addressed in the draft legislation.
