Her Majesty's Preference
Adam Smith Institute - Chapter 11
The UK bankruptcy problem, though, is HM Revenue & Customs. When a firm fails, they are fist in the queue for payment. Suppliers and customers get left with a few pence for each pound they’re owed. ...It would be better.. if they (HMRC) were in the same queue as all the other creditors.
Even Homer nods - HM Revenue & Customs
HMRC does not have preferential status in the distribution of the assets of an insolvent estate. The former Departments of Customs & Excise and Inland Revenue both lost preferential status on 15 September 2003 under the provisions of the Enterprise Act 2002.
Something that even their debt collectors "don't know" as when I was being chased for an erroneous debt they tried the "preferential creditor" line on me and I was able to correct them and never heard from them again.
UPDATE - The ASI blog post has been silently edited and the error corrected.
Comments
Actually, as a former debt collector, I would say the problem lies with the Insolvency Practitioners who charge fucking horrendous fees for administering the estate of a bankrupt. You can expect a senior practitioner to charge will in excess of £100 per hour just to fill in an expenses form - I kid you not.
Posted by: wonkotsane | July 17, 2008 7:26 AM