Further warning over insolvency debts
Commentators twelve months on are calling for the Government to reconsider the policy to prioritise debts owed to HMRC over other creditors, due to come into force on 6 April 2020.
Following the announcement in the 2018 Budget, eleven Business Organisations and Insolvency Experts earlier this month wrote to the Chancellor Savid Javid.
The group of experts warned the Chancellor that “the proposed policy would reverse successive government’s attempts to encourage a culture of business rescue in the UK”.
As we highlighted in a previous article
https://www.poppletonandappleby.co.uk/warning-new-hmrc-preferential-creditor-status-adds-brexit-concerns-economic-pressures-businesses/ our biggest concern is the likely impact the proposal will have on business funding, as floating charge lending will become much riskier for the lender.
This may affect new lending as well as existing borrowers whose facilities are due for review or renewal.
The 11, including ICAEW, R3 and Venture Capital Association have called for a change in direction and suggested meeting with the Chancellor to discuss the issues raised.
If you would like more information about the changes that are coming and an illustration of how that might affect both new and existing lends to your clients, then please get in touch on 0121 200 2962.