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The Insolvency Act 1986 (HMRC Debts: Priority on Insolvency) Regulations 2020

S.I. 2020/983 · Made 11 September 2020

Original text. legislation.gov.uk does not revise statutory instruments, so later amendments are not shown here. Changes made to it are listed under each provision when known.

Bankruptcy

Debt

Education

Income Tax

Insolvency

Social Security

Made 11th September 2020

Laid before the House of Commons 14th September 2020

Coming into force 1st December 2020

The Treasury make the following Regulations in exercise of the power conferred by section 99(3) of the Finance Act 2020f1.

Annotations to the whole text

Footnotes

f1

2020 c. 14.

Contents

  1. 1Citation and commencement
  2. 2Specified deductions
  3. Signature
  4. Explanatory note

1Citation and commencement

These Regulations may be cited as the Insolvency Act 1986 (HMRC Debts: Priority on Insolvency) Regulations 2020 and come into force on 1st December 2020.

2Specified deductions

(1)

The deductions set out in paragraph (2) are specified for the purposes of—

(a)

paragraph 15D(3)(c) of Schedule 6 to the Insolvency Act 1986f1,

(b)

paragraph 8A(3)(c) of Schedule 3 to the Bankruptcy (Scotland) Act 2016 (asp 21)f2,

(c)

and paragraph 22(3)(c) of Schedule 4 to the Insolvency (Northern Ireland) Order 1989f3.

(2)

The deductions are—

(a)

deductions under section 61 (deductions on account of tax from contract payments) of the Finance Act 2004f4,

(b)

deductions under paragraph 6(1)(b) (deduction of earnings-related contributions) of Schedule 4 to the Social Security (Contributions) Regulations 2001f5,

(c)

deductions under regulation 21 (deduction and repayment of tax by reference to employee’s code) of the Income Tax (Pay As You Earn) Regulations 2003f6, and

(d)

deductions under regulation 50 (deductions of repayments) of the Education (Student Loans) (Repayment) Regulations 2009f7.

Signature

Michael Tomlinson

Rebecca Harris

Two of the Commissioners for Her Majesty’s Treasury

11th September 2020

Explanatory note

(This note is not part of the Regulations)

The Finance Act 2020 amends the Insolvency Act 1986, the Bankruptcy (Scotland) Act 2016 and the Insolvency (Northern Ireland) Order 1989 to make provision for certain debts owed to Her Majesty’s Revenue and Customs to be included in a category of preferential debt (or, in Scotland, preferred debt) for insolvency purposes. The amounts are those in respect of value added tax or a relevant deduction. A deduction is a relevant deduction if certain conditions are met. One of those conditions is that the deduction is of a kind specified in regulations. These Regulations specify the deductions listed in regulation 2 for those purposes.

A Tax Information and Impact Note covering this instrument was published on 11 March 2020 alongside the draft legislation and is available on the website at https://www.gov.uk/government/publications/introduction-of-changes-to-protect-your-tax-in-insolvency/introduction-of-changes-to-protect-your-tax-in-insolvency. It remains an accurate summary of the impacts that apply to this instrument.