Rachael Markham

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The proposal to reinstate Crown preference in insolvency has met resistance from all angles; the insolvency profession, turnaround experts, accountants, lawyers and funders. But despite HMRC’s bold statement in its consultation paper that the re-introduction of Crown preference will have little impact on funders, it is clear following a discussion with lenders that it may well have a far wider impact on existing and new business, business rescue and the economy in general than HMRC…
This morning Squire Patton Boggs in conjunction with R3 hosted representatives from across the business community to discuss the proposed return of Crown preference in insolvency. Following the Government announcing in last Autumn’s Budget that HMRC’s preferential status will be restored in part in April 2020, Squire Patton Boggs together with R3 and representatives from creditor bodies, insolvency and restructuring professionals, banks, the funding community, government, and business representative bodies aired their views about the…
Crown prerogative dates back to the Magna Carta entitling the monarch to absolute priority for revenue related debt. Come 6 April 2020 will we really be heading back to feudal times and 1215? The proposal to reinstate Crown preference was announced as part of the Autumn Budget last year and came as a surprise to many.   The expected consultation paper published by HMRC this week seeks the views of individuals, shareholders, directors, lenders, companies and…
There has always been a tension between protecting the interests of defined benefit pension schemes and insolvency given on the one hand The Pensions Regulator (TPR) seeks to protect the interests of pension scheme members and the Pension Protection Fund and on the other, the insolvency regime seeks to protect the interests of creditors as a whole. We published an article in July 2018 reporting on a consultation paper issued by The Department for Work…
We are yet to see the true impact of Christmas trading in the retail industry although HMV is already a victim of the tough conditions for retailers. Additionally, Boots has announced a fall in sales and the launch of a “transformational costs management program” to save more than $1 billion and Next has confirmed that profits in store have fallen and although online sales are up, the uncertainty about the UK economy after Brexit makes…
It is often common practice for small businesses to structure payments to a director (who is also a shareholder) through a combination of dividend payments and salary, in order to minimize PAYE liabilities and reduce tax.  Consequently, rather than be paid a salary, a director is “remunerated” by dividend payments.  This works when the company declaring the dividend has sufficient distributable reserves – but when it does not, those payments are unlawful and can be…
Following the Enterprise Act 2002, the preferential status which HMRC had enjoyed in an insolvency was abolished, rendering HMRC the same as any other unsecured creditor. The effect of this was to swell the pot of assets available to be applied to all unsecured creditor claims. Philip Hammond announced in Monday’s budget that HMRC’s preferential status is to be restored. What does this mean for HMRC and unsecured creditors?…
On 26 August, the Government announced that it will be making changes to UK insolvency legislation. The changes are intended to support distressed companies and address issues highlighted by major company failures and include: the ability for all companies to apply for a moratorium a new insolvency process – the “restructuring plan”, enabling companies to cram down creditors a prohibition on suppliers enforcing termination provisions in contracts and licences upon insolvency an increase in…
The Ministry of Justice is seeking feedback from key stakeholders on the impact of Part 2 of the LAPSO reforms, which abolished the recoverability of success fees under CFAs and after the event insurance premiums. Until April 2015 insolvency claims were exempt, enabling insolvency practitioners to pursue claims and if successful recover any success fee and more importantly after the event insurance premiums. There was concern at the time, that by abolishing the ability to recover…
The Department for Work and Pensions has issued a consultation paper which seeks to strengthen the powers of TPR in connection with defined benefit pension plans, coming in response to recent corporate failures which had pension plans with significant deficits. The proposals introduce four new “notifiable events” in addition to those that already exist, the introduction of hefty (potentially unlimited) fines, through the introduction of new civil and criminal penalties and widening the net of…