Guidance

Company Voluntary Arrangements ― supporting businesses

Updated 13 December 2024

HMRC Company Voluntary Arrangements service contributes to the support of businesses in temporary financial difficulties.

Conditions for supporting a proposal

We consider voluntary arrangements on a case-by-case basis, and will vote to support
proposals where:

• debtors are honest in their financial disclosure
• an optimised and achievable offer is made to creditors
• provision is made for payment of all future debts on time
• there are no exceptional reasons for rejection

We will not support debtors who do not allay our concerns about their proposals.

HMRC expect an optimum and achievable offer specifically for HMRC. HMRC will not
accept any Company Voluntary Arrangement where unsecured creditors are being paid whilst HMRC’s claim is being compromised.

We aim to respond to all voluntary arrangement proposals received in good time.

Working with you

We depend on you to deliver the most appropriate solution and confirm to creditors:

• the debtor’s true position with regarding assets and liabilities
• that the open market value of assets is not materially different from the proposal
• that values being placed upon liabilities are not materially different from the proposal
• that the proposal has a real prospect of working

Where these points are not clear we may seek explanations from you. We will also:

• compare our knowledge of the financial position with that stated in the proposal
• look critically at projected income and expenditure
• require that provision is made for payment of all future post voluntary arrangement statutory liabilities as they fall due

We may discuss with you as the nominee or with the debtor such issues as:

• historical information already disclosed in the proposal
• financial information that may have been excluded
• any other confidential information that influences our decision

HMRC has introduced electronic banking facilities to help insolvency practitioners and HMRC with the payment of dividends. HMRC expects dividends to be paid through Bacs to the correct account details with accurate Company Voluntary Arrangement references.

Modifying a voluntary arrangement

If the debtor’s proposal is inadequate, we will propose modifications.

HMRC has standard modifications to protect our position in the Company Voluntary Arrangement and will submit
relevant modifications if not included in the proposal.

We may also request technical amendments to the proposal that will not affect the
debtor’s obligations.

Voting against the commercial offer

We will not support a commercial offer if we suspect it falls short of representing a full and honest financial disclosure. As a minimum we expect to see:

• a detailed business cash flow forecast and a projection for at least the first 12 months of the proposed arrangement
• reliable or professional valuations
• a statement of business assets and liabilities (including all taxes)
• that all previously overdue tax returns have been submitted ― outstanding tax returns are required to be submitted, including those outstanding returns after the insolvency starts and insolvency practitioners should deal with any outstanding returns prior to submission of the Company Voluntary Arrangement
• full reasons for past non-payment of tax and clear explanation of changes made to enable payment of post approval Crown liabilities as well as VA contributions

HMRC expects all of its secondary preferential liability to be cleared in full prior to any distribution to unsecured creditors and may not support a proposal where this is not the case.

If we do not have the above information, it is likely that we will decide to vote against
the proposal. If the information is later received, we cannot guarantee to revisit the
original decision.

Rejecting a voluntary arrangement

We are also likely to reject a voluntary arrangement where there is evidence of:

• evasion of statutory liabilities or past association with contrived insolvency
• payment of other creditors at the same time as withholding sums due to the Crown
• any proposal that requires sale of HMRC debt or does not provide cash dividends
• failure to meet any obligations under a prior voluntary arrangement
• a purchaser assuming responsibility for payment of some of the debtor’s debts in consideration for the purchase of the debtor’s assets
• any proposal by any member of any organisation that requires debts owed to its members, to be paid in full, whether inside or outside of the arrangement or before or after the completion of the arrangement when all other unsecured creditors will become bound to accept a compromise of their debt ― ‘members’ includes any prescribed associates or other creditors specified by the organisation

We will explain our reasons for rejecting a voluntary arrangement if such a request is
addressed to us.

Help us to respond quickly

Voluntary arrangement service

The voluntary arrangement service at Cardiff deals with Company Voluntary Arrangements.

All Company Voluntary Arrangement proposals for HMRC as well as VAT 769 notification forms for voluntary arrangements should be sent to:

Debt Management ― EIS C
HM Revenue and Customs
BX9 1SH

Email: eisc.cva@hmrc.gov.uk

Telephone helpline: 0300 322 9251

Opening times:

Monday to Friday: 8:00am to 5pm

Tell us your:

• National Insurance number
• PAYE or tax reference
• VAT registration number

Make sure proposals:

• satisfy the substance and spirit of our acceptance criteria
• are supported by detailed and reliable financial information
• are clear and unambiguous as to terms, roles and obligations

Discussions with creditors

We reserve the right to discuss the content of a proposal and supporting documentation with any:

• listed creditor
• creditor confirmed by the nominee