Insolvency

Treasury written question – answered on 8th October 2019.

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Photo of Adrian Bailey Adrian Bailey Labour/Co-operative, West Bromwich West

To ask the Chancellor of the Exchequer, what discussions his officials had with the Insolvency Service on the draft Finance Bill 2019-20 prior to its publication on 11 July 2019; and whether views were sought on the policy to make HMRC a secondary preferential creditor in insolvencies.

Photo of Adrian Bailey Adrian Bailey Labour/Co-operative, West Bromwich West

To ask the Chancellor of the Exchequer, what assessment he has made of the effect of establishing HMRC as a secondary preferential creditor in insolvencies on the sustainability of the Pension Protection Fund.

Photo of Adrian Bailey Adrian Bailey Labour/Co-operative, West Bromwich West

To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect of the policy to make HMRC a secondary preferential creditor in insolvencies on the number of corporate insolvencies from Q1 2020 onwards.

Photo of Adrian Bailey Adrian Bailey Labour/Co-operative, West Bromwich West

To ask the Chancellor of the Exchequer, what assessment he has made of the effect of establishing HMRC as a secondary preferential creditor in insolvencies on the ability of SMEs to access finance.

Photo of Jesse Norman Jesse Norman Financial Secretary to the Treasury and Paymaster General

The Government carefully considered the case for reform prior to announcing this change last year, and it is the Government’s view that taxpayers can reasonably expect that when they have successfully paid their taxes, these go to fund public services as intended.

This measure represents a proportionate approach that balances the interests of taxpayers, the Exchequer, and other creditors.

The Government expects the impact on the sustainability of Pension Protection Fund (PPF) to be marginal. This reform will not lead to a significant change in recoveries to the PPF compared to current returns.

The Government does not expect this reform to affect significantly SMEs’ access to finance or corporate insolvencies, and in line with the Government’s commitment to open and consultative policymaking is engaging with a wide variety of stakeholders to ensure policy changes are well informed and based upon the best available evidence.

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