Policy paper

HMRC as a preferential creditor

This policy paper explains how taxes paid by employees and customers are protected in insolvency procedures commencing after 1 December 2020.

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Details

When a company or individual becomes insolvent, the taxes paid by employees and customers, which the insolvent business was temporarily holding, do not always go to fund public services as intended. In such cases, they often go towards paying off debts owed to other creditors.

This policy paper explains how taxes paid by employees and customers will be protected in insolvency procedures commencing after 1 December 2020.

Updates to this page

Published 30 November 2020

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