Yesterday (30 July), the Insolvency Service published its quarterly insolvency statistics for April to June 2020 (Q2 20).
Some may be surprised to learn that, during these uncertain times, company insolvencies in England and Wales have declined by one-third compared to the same quarter ending June 2019 (Q2 19).
By way of a breakdown, and by comparing Q2 20 with Q2 19, the numbers of:
GOVERNANCE & SECURITIES LAW FOCUS
JULY 2020/LATIN AMERICA EDITION
Below is a summary of the main developments in U.S., EU, and U.K. corporate governance and securities law since our last update in May 2020.
See our page dedicated to the latest financial regulatory developments.
IN THIS ISSUE
The first half of 2020 saw a wave of company voluntary arrangements (CVAs) as companies explored their restructuring options against the backdrop of a darkening economic outlook.
On 4 June 2020, a draft of The Insolvency Act 1986 (HMRC Debts: Priority on Insolvency) Regulations 2020 was provided to the Public Bill Committee. The Regulations are due to come into force on 1 December 2020.
The draft Regulations set out the debts due to HMRC that will have ‘secondary’ preferential status in insolvencies from 1 December 2020. They are debts in respect of PAYE income tax, employee NICs, construction industry scheme deductions and student loan repayments. VAT debts are to be treated in the same way, though are not covered by these draft Regulations.
GOVERNANCE & SECURITIES LAW FOCUS
JULY 2020/EUROPE EDITION
Below is a summary of the main developments in U.S., EU, U.K. and Italian corporate governance and securities law since our last update in April 2020.
See our page dedicated to the latest financial regulatory developments.
IN THIS ISSUE
The Finance Act 2020 received Royal Assent today (22 July), confirming the anticipated but opposed intention to restore HMRC as a secondary preferential creditor on insolvency.
From 1 December 2020 HMRC’s claim will sit ahead of floating charge holders and unsecured creditors reducing the monies available for distribution to both when a corporate files for insolvency.
UPDATED 3 AUGUST 2020
Updates marked with *
Updated: Ireland, Israel
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A new era of corporate compliance in a time of financial crisis |
A recent case has highlighted the dangers of the treatment of a Director’s Loan Account (“DLA”), and the risks to directors of trying to re-categorise their DLAs as salary payments. This can mean that the information previously provided to HMRC was incorrect and puts directors at risk of penalties and possibly even a charge of tax evasion.
Conversion of Director’s Loan Accounts to Dividends
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