From today HMRC will become a secondary preferential creditor in insolvencies (corporate and personal) placing it ahead of the ordinary creditor.
The provisions can be found within the Finance Act 2020 at page 79, Part 4, Miscellaneous and Final, Insolvency, HMRC debts: priority on insolvency.
“Schedule 6 ‘The Categories of Preferential Debts’ of the Insolvency Act 1986, has been amended. From 1 December 2020 certain HMRC debts will fall within the categories of preferential debts. However, these debts will rank at the bottom of the ladder of these type of debts. All other preferential debts listed in schedule 6 must be paid in full before HMRC are to receive a distribution under its new but clearly the advantages to HMRC are substantial. We wait to see how the amendments work in practice but the likelihood is that secured lenders will have to reconsider the extent of their lending and the nature of the security taken