ICAEW responded to the consultation on draft Finance Bill 2019-20 legislation on tax abuse using company insolvencies as ICAEW REP 88/19.
The response was prepared by ICAEW’s Business Law Department and reflected input from the Tax Faculty and ICAEW’s Insolvency Committee.
The representation expressed concern that the potential ramifications of the proposal had not been considered beyond increasing tax-take sufficiently, in particular as regards the possible impact on enterprise (including company restructuring). The proposed legislation gives HMRC draconian powers that may make doing business through UK incorporated companies significantly less attractive.
If there are gaps in company or insolvency law, they might better be addressed through reform of those laws rather than increasing the powers of HMRC, which already has extensive powers not available to ordinary creditors.