There has always been a matter of contention for a Committee of Creditors, Resolution Professionals, legal fraternity during Corporate Resolution Insolvency Process (CIRP), whether the dues of the Government like Income-Tax, Sales Tax, Value Added Tax etc. are secured debt and whether the Government is a secured creditor.
The National Company Law Appellate Tribunal has answered this question in affirmative in its recent๐ท๐๐ฑ๐ด๐ฒ๐บ๐ฒ๐ป๐ ๐ฑ๐ฎ๐๐ฒ๐ฑ ๐ณ๐๐ต ๐๐ฒ๐ฏ., ๐ฎ๐ฌ๐ฎ๐ฏ ๐ถ๐ป ๐๐ผ๐บ๐ฝ๐ฎ๐ป๐ ๐๐ฝ๐ฝ๐ฒ๐ฎ๐น (๐๐ง) (๐๐ป๐๐ผ๐น๐๐ฒ๐ป๐ฐ๐) ๐ก๐ผ. ๐ฎ๐ฐ๐ฎ ๐ผ๐ณ ๐ฎ๐ฌ๐ฎ๐ฎ (๐ฃ๐ฟ๐ถ๐ป๐ฐ๐ถ๐ฝ๐ฎ๐น ๐๐ผ๐บ๐บ๐ถ๐๐๐ถ๐ผ๐ป๐ฒ๐ฟ ๐ผ๐ณ ๐๐ป๐ฐ๐ผ๐บ๐ฒ ๐ง๐ฎ๐ & ๐๐ป๐ฟ. ๐๐. ๐๐๐๐ฎ๐บ ๐๐ผ๐บ๐ฝ๐ฎ๐ป๐ ๐๐ป๐ฑ๐ถ๐ฎ ๐๐๐ฑ).
Can a liquidator run an unjust enrichment claim to seek to recover PAYE and NIC liabilities from a companyโs directors arising from the companyโs use of a โdisguised remunerationโ employee benefit trust (โEBTโ) scheme? Based on the findings of ICC Judge Barber in the case of Re Ethos Solutions Ltd, the answer is โnoโ.
EBTs: Background
News of HSBC's acquisition of Silicon Valley Bank UK (SVB UK) has brought huge relief to the UK tech community and wider economy โ quite possibly the optimal result in the circumstances following the Bank of England's announcement of a likely insolvency procedure on Friday 10 March.
Concern amongst sports aficionados around the financial integrity of the sports industry was raised in late 2022 when rugby union was the latest sport to be dragged into the insolvency conversation. Both Wasps RFC (Wasps) and Worcester RFC (Worcester, and together with Wasps, the Clubs), who can each trace their history back to the mid-19th century, appointed administrators after facing financial difficulties they attributed to the Covid-19 pandemic and resulting lockdowns.
Summary
In the recent Court of Appeal decision Bacci v Green [2022] EWCA Civ 1393 the Court, upholding the decision of the High Court, held that a judgment debtor can be ordered to delegate authority to waive valuable tax protection and draw pension where doing so would enable creditors to extract what they were owed.
The Facts
In 2017, Matthew Green, son of established Mayfair art dealer Richard Green, committed fraud in obtaining loans from FundingSecure.
Where a commercial property is sold by a receiver or insolvency practitioner (IP), VAT must be charged on the sale if the owner had exercised and properly notified an option to tax (OTT) in respect of the property. The IP acting on behalf of the seller needs to establish whether an OTT has been made and notified so that VAT is charged , if needed. This can be difficult if company records are in disarray, directors of the insolvent company are non-cooperative and/or the IP or receiver has limited knowledge of the property and company.
Nicola Sharp considers the recent appeal decision in Tradition Financial Services Ltd vBilta (UK) Ltd [2023] EWCA Civ, and the ways in which it a๏ฌects the de๏ฌnition of fraudulent trading.
With an increased number of businesses experiencing financial difficulties given rising inflation, the weaker pound and interest rate increases, debt restructurings are becoming, and are expected to continue to become, more common.
Such restructurings are often achieved by a third-party lender releasing or materially amending all or part of its debt, which would result in taxable income arising to a UK corporate borrower unless a relevant exemption applies.
Introduction - ใฏใใใซ
2016ๅนด็ ด็ฃๅ็ฃๆณใฏใๆธ ็ฎๆใซใใใๅตๆจฉ่ ใฎๅตๅๅผๆธใๅฎ็พใใไป็ตใฟใๆไพใใพใใใพใใๆๆ ไฟๅตๆจฉ่ ใฏๅชๅ ็ใชๅตๆจฉๅๅใๅฏ่ฝใงใใใใใใชใใใState Tax Officer v. Rainbow Papers Ltd.๏ผRainbow Papers Judgement๏ผใซใใใฆใใใใ่ฆใๅคๆฑบใไธใใใพใใใ2003 ๅนดใฎ Gujarat Value Added Tax Act๏ผGVATๆณ๏ผใซๅบใฅใใฆ็บ็ใใ็จ้ใฎ่ซๆฑใซใคใใฆใๆฟๅบใซๆๅฉใซ่จญๅฎใใใใๆ ไฟๆจฉใใซใใใ็จๅๅฝๅฑใฏๆณใฎไธใฎใๆๆ ไฟๅตๆจฉ่ ใใงใใใใจๅค็คบใใใฎใงใใๅๅปบ่จ็ปใๆฟๅบใธใฎๆณๅฎ็ดไป้ใ้คๅคใใฆใใๅ ดๅใๆณ่ฆๅฎใซๆบๆ ใใฆใใใจใฏ่จใใใๆฟๅบใซๅฏพใใๆๆๅใฏๆใใชใใใจใใพใใใ
ๅฝ่ฉฒๆ้ซ่ฃๅคๆใฎๅคๆฑบใฏใ็ ด็ฃๅ็ฃๆณใฎไธใฎๆณๅฎๅ ฌ่ชฒๆฑบๆธใฎๅชๅ ้ ไฝใจใใๅด้ขใซใใใฆใๅคงใใชๆธๅฟตใๆฑใใใใใฎใจใชใใพใใใไปๅใฎ่จไบใงใฏใๅฝ่ฉฒๅคๆฑบใใ็ ด็ฃๅ็ฃๆณใฎๆฌๆฅใฎ็ฎ็ใใใณใใฎไปใฎๅ็จฎๅคไพใจใฉใฎใใใซๅฏพ็ ง็ใงใใใใซใคใใฆ่ๅฏใใ่งฃ่ชฌใใฆใใพใใ
Brief facts - ๆฆ่ฆ
Todayโs statistics reveal a stark reality that insolvencies are continuing to climb in the face of record levels inflation, increasing interest rates and an ongoing cost-of-living crisis, which is pushing businesses to breaking point. The situation is exacerbated by the lack of any new government support for businesses, which are particularly affected by the steep rise in energy costs.