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Joint and several liability of company directors to VAT debts in certain cases of insolvency

On 11 July 2019, HMRC announced¹ a measure² to combat 'the small minority of taxpayers who artificially and unfairly seek to reduce their tax bill to the misuse of insolvency of companies.' The measure is to take effect from 22 July 2020, and makes certain persons jointly and severally liable for amounts payable to HMRC where they are a director, shadow director or otherwise connected to a company which is, or is likely to be, subject to an 'insolvency procedure'. This is defined in FA 2020, Sch 13, para 8 as a company which³:

1. Ìý

   •ÌýÌýÌýÌý is undergoing, or has undergone, a 'relevant winding up' (as defined)

2. Ìý

   •ÌýÌýÌýÌý is in administration

3. Ìý

   •ÌýÌýÌýÌý is in receivership

4. Ìý

   •ÌýÌýÌýÌý a 'relevant scheme' (as defined) has effect in relation to it

5. Ìý

   •ÌýÌýÌýÌý has been struck off the Companies Register

Further details of the measure are set out below.

Application

The