Javid warned over insolvency debts
Eleven business organisations and insolvency experts have written to chancellor Sajid Javid warning him that prioritising debts owed to HMRC over those of other creditors in insolvencies will have a serious impact on UK economic growth
The 11 – which range from ICAEW, the City of London Law Society, R3 and the Chartered Institute of Credit Management, to the British Private Equity and Venture Capital Association – make it clear that the proposed change will make it more difficult to rescue businesses. It will also reduce access to finance for small businesses, increase the harm done to other businesses in insolvencies and could ultimately result in losses to the exchequer.
“While we understand that the government wishes to increase the value of taxes repaid in the event of insolvency, there is a serious risk that the wider costs of the government’s approach will outweigh any expected benefit,” they wrote in the letter.