Experts have warned Chancellor of the Exchequer Sajid Javid that prioritising HMRC over other creditors in insolvencies will have a ‘negative impact on the UK’s economic growth’.
The letter that issued the warning was signed by 11 business organisations and insolvency experts. Signatories of the letter include the Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants of Scotland, the Insolvency Practitioners Association and the City of London Law Society.
The letter claims that the proposed change will make it more difficult to rescue businesses. According to the organisations, it will also reduce access to finance for small businesses, increase the harm done to other businesses in insolvencies and could ultimately result in losses to the Exchequer.
Quote from Nigel Holland:
“As the letter states, prioritising HMRC over other creditors could ultimately cause more losses for the Exchequer. The small amount of upfront money gained would be a poor trade-off for the large losses that could be had down the line.”