HMRC Rights Explained

Advice to companies and HMRC Rights Explained

HMRC's rights in relation to dealing with insolvent businesses or companies are very detailed. Please call us or apply online advice on HMRC rights and tax issues explained

On the insolvency of a company the monies that become available for creditors are distributed in a set order. That repayment order is as follows:

  1. Secured Creditors. Secured creditors hold a legal mortgage, a legal charge or a fixed charge.
  2. Preferential creditors. Preferential creditors in the main are amounts due to employees for arrears of wages and holiday pay.
  3. After preferential creditors These are in full a "prescribed part" of the sum remaining is put to one side for unsecured creditors
  4. Floating charge The sum remaining is paid to creditors such as you who hold a debenture which grants a "floating charge".
  5. Unsecured creditors Unsecured creditors include VAT, PAYE, CIS Tax, NI, Corporation tax, trade creditors and expense creditors. From this you will appreciate that "unsecured creditors" are often the main group of creditors in any insolvency.

We provide help and information to businesses who need help and assistance understanding the tax system and HMRC rights explained in plain English. Please call us or apply for help online to get HMRC rights explained