3 minute read
The Crown Rises
HMRC preferential status in insolvencies was reinstated on December 1st 2020. Restructuring and insolvency expert Nick Parsk, a director at advisory fi rm Quantuma, explains what the changes are and the impacts the legislation will have on business owners.
What are the changes?
Currently, when a company goes into an insolvency process like liquidation, the amounts owed to HMRC rank equally with all other unsecured creditors. So, in the event there is a dividend to be paid to creditors from the assets realised in the liquidation, HMRC would share in the dividend paid to all unsecured creditors.
However, from December 1st 2020, the amounts owed to HMRC (for VAT, PAYE, employee NIC and Corporation Tax) will rank in priority to these other unsecured creditors and also fl oatingcharge holders. Therefore, if there is any dividend to be paid, HMRC will be paid the amount they are owed fi rst, and anything left will be divided amongst other creditors equally. Floating-charge holders are typically banks, who lend a company funds and secure the lending by registering a charge against the company’s assets. This way, if a company does fail, they receive a dividend from the proceeds of the assets ahead of unsecured creditors.
What are the impacts to business owners?
If a bank has been granted a charge over the company’s assets to provide a funding facility but the bank has also requested you, as a director, to provide a personal guarantee in relation to any indebtedness, currently you may consider that in the event the company did enter an insolvency process, there may be enough assets to pay-off the bank. However, you may not be aware that from December 1st 2020 the bank will only be paid under their fl oating charge security after HMRC has been paid all of their arrears! This could have a huge impact on the lending you have guaranteed.
To fi nd out more about how we at Quantuma are able to support businesses during this time, please visit our website at www.quantuma.com/fortitude
POST UK TRANSITION
ARE YOU READY?
As the Transition Period comes to an end on the December 31st 2020, and a new era of procedures, processes, trading, customs and checks on goods moving between the UK and EU countries come into effect, businesses have an increasing amount of questions but very few clear answers or sources of information.
Surrey and Sussex Chambers of Commerce, in partnership with Coast to Capital Growth Hub and Better Business for All, recently hosted an incredibly successful two-hour virtual event “Post UK Transition – Are you ready?” with over 100 local businesses.
Joined by numerous specialists and experts within their fields each of whom addressed key issues that are vital to maintaining and growing trade and more importantly, ensuring businesses are compliant.
The topics covered included: n Regulation and certification marking n Tax n Food and Drink labelling, packaging n Digital, e-commerce and data protection n Customs, borders and tariffs, documentation (including Customs
Declarations) n People
INTERNATIONAL TRADE
Surrey Chambers of Commerce is
trade with the EU?
a British Chambers of Commerce accredited issuer of export documentation. You can apply to us for the documentation that you will need for trading internationally.
We are here to help you understand the many regulations surrounding international trade. It is worth noting that Chamber members receive customs union during this transition follow and new forms to complete.
a significant discount on all International Trade documentation.
www.surrey-chambers.co.uk/ trade-service/about-us
Surrey Chambers has recently recruited an additional International Trade team member to help deliver the increasing demand for Customs declarations.
CUSTOMS DECLARATION TRAINING Is your business ready for January 1st 2021 and the end of the transition period? Are you a customs agent? Or does your company use customs agents and intermediaries to help you
If so, you need to know how to meet customs requirements fast and efficiently.
The United Kingdom has already left the European Union but remains in the period which ends on December 31st 2020. There will be new processes to
NEWSFLASH
We are ready – are you?
Our training will highlight what you need to know to be able to accurately complete a simple customs declaration.
