ICAEW responded to the consultation on draft Finance Bill 2019-20 legislation on changes to protect tax in insolvency cases published by HMRC as ICAEW REP 89/19.
The response was prepared by ICAEW’s Business Law Department and reflected input from the Corporate Finance Faculty and ICAEW’s Insolvency Committee.
ICAEW has urged the government to withdraw the proposed legislation. ICAEW expressed a number of concerns including that the proposal did not take into account the impact that a change of this kind will have on the lending sector and enterprise more generally. In particular, it will reduce access to finance in the UK by making lending on a ‘floating charge’ basis much riskier. A restriction on access to finance will make it harder to rescue businesses.