Tag Archives: HMRC

What are the Key Takeaways for managing HMRC in a UK restructuring plan (RPs) and beyond?

Much will depend on the specifics of a company’s financial position, but there are some themes from the OutsideClinic and Enzen judgments that are helpful – and arguably so even beyond the context of RPs for a company’s managing its relationship with HMRC. Is HMRC in or out of the money? In OutsideClinic HMRC had … Continue Reading

And just like that another Restructuring Plan is sanctioned with HMRC supporting (UK)

The Outside Clinic restructuring plan (RP) was sanctioned last week with HMRC voting in favour of it. In a similar vein to Enzen (see our earlier blog) HMRC initially indicated that it was not inclined to support the plan, but, after negotiating a higher return following the convening hearing, it voted in favour of it. A … Continue Reading

HMRC Supports a UK Restructuring Plan with its Change in Approach – Good News for Future RPs?

You may have read our previous blog about the Outside Clinic Restructuring Plan (RP) which asked whether 5p was enough to cram down HMRC and thought, well surely if that’s not enough, 10p would work? The Enzen Restructuring Plans (RPs) that were sanctioned this week also sought to compromise HMRC’s secondary preferential debt proposing a … Continue Reading

(UK) Is 5p enough to cram down HMRC in a Restructuring Plan?

For those in the mid-market who have watched developments in restructuring plans (RP) move from a potential rescue tool, to something prohibitively expensive, the OutsideClinic RP might be one to watch. Not least because the RP seeks to cram down HMRC. Following RPs proposed by Naysmyth and the Great Annual Savings Company (which were unsuccessful … Continue Reading

(UK) The Gloves are off for HMRC: What did we learn from the Great Annual Savings Sanction Hearing?

Yesterday saw the end of a three-day sanction hearing for the restructuring plan (the “Plan”) of the Great Annual Savings (GAS) company, with Justice Adam Johnson reserving his judgment and importantly, his decision on whether to exercise cross-class-cram-down to sanction the Plan for a later date. As we discussed in our recent blog, the Plan … Continue Reading

“It’s the principle of the thing”: HMRC fights back against UK Restructuring Plans

‘If, at first, you don’t succeed, then try and try again’ is a fitting description for HMRC’s recent approach to restructuring plans, with its opposition of plans proposed by The Great Annual Savings Company (GAS) and Nasmyth Group Limited (Naysmyth). The GAS sanction hearing (which is due to take place this week) will be the … Continue Reading

(UK) Court Crams Down HMRC in the latest SME Restructuring Plan

There has been very little to indicate how HM Revenue and Customs (“HMRC”) might approach a restructuring plan (RP), following HMRC’s preferential status being restored in 2020.     The reinstatement of HMRC as a preferential creditor potentially makes company voluntary arrangements non-viable if HMRC do not support, but what about RPs?   RPs introduced for the first … Continue Reading

Business Recovery: How Should UK Companies Approach HMRC for Support?

As part of our business recovery and resilience series, our third video from Rob O’Hare (PSL in our Tax  team), responds to the question: How should companies approach HMRC for support and what support might they expect?  To listen to Rob’s answer click here. We will also shortly be releasing an alert explaining the situations … Continue Reading

Settling Tax Debts: How Much Support Will HMRC Provide To Your UK business?

Following the UK business secretary offering assurance that HMRC will take a ‘cautious approach’ to recovering tax debts (see our previous blog), HMRC has now published guidance outlining its approach. This guidance also explains how HMRC might respond where a business has taken advantage of one of the government backed lending schemes (such as a … Continue Reading

COVID-19 (UK): Small mercies – HMRC clarify position on insolvency proceedings

In a move that will be greeted with a small sigh of relief by individuals, businesses and insolvency practitioners affected by the coronavirus pandemic (COVID-19), HM Revenue and Customs (HMRC) has published new guidance on its approach to insolvency procedures. The guidance covers: Ongoing voluntary arrangements (VA), and HMRC’s enforcement activity… Continue Reading

What impact does the General Election have on the proposed return of Crown preference?

The government announced its intention to reinstate HMRC as a secondary preferential creditor in the 2018 Autumn Budget. Following consultation on this policy, the draft Finance Bill 2019/2020 was published. It was then subject to further technical consultation. Usually a policy is confirmed (or delayed or abandoned) in the Autumn Budget and if confirmed, will … Continue Reading

The Government fails to listen to lenders as it presses on with reforms which may stifle UK enterprise

  We reported last week that the Government intends to proceed with its proposal to reinstate HMRC as a preferential creditor on insolvency, which could spell disaster for UK businesses, lenders and the UK economy. The Government has failed to listen to lenders and others who responded to the Government’s consultation about the impact of … Continue Reading

Draft Finance Bill published: HMRC preferential status on insolvency confirmed

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 … Continue Reading

Back to the future? The return of Crown preference

The proposal to reinstate Crown preference in insolvency has met resistance from all angles; the insolvency profession, turnaround experts, accountants, lawyers and funders. But despite HMRC’s bold statement in its consultation paper that the re-introduction of Crown preference will have little impact on funders, it is clear following a discussion with lenders that it may … Continue Reading

When is a decision to declare an interim dividend a decision?

It is often common practice for small businesses to structure payments to a director (who is also a shareholder) through a combination of dividend payments and salary, in order to minimize PAYE liabilities and reduce tax.  Consequently, rather than be paid a salary, a director is “remunerated” by dividend payments.  This works when the company … Continue Reading
LexBlog