HMRC regained 'preferential creditor' status in 2020, reclaiming tax ahead of other unsecured creditors. Controversial Crown Preference raises concerns over impact on smaller creditors.
Reintroduction of Crown Preference could lead to banks reducing lending amounts and increasing interest rates due to higher risk. Money recovered by HMRC questions the benefits and strain on smaller creditors.
“The amount of money raised so far through Crown Preference is a surprisingly small pot for HMRC. That money would make a lot of difference to some other creditors.” - Mark Boughey, Forvis Mazars
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