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Understand the role of HMRC and Secured Creditors

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We can help with serious company debts, HMRC and creditor pressure, VAT/PAYE/Tax arrears, cashflow problems and raising finance.

Considering a CVA? Understanding the Role of HMRC and Secured Creditors is Vital to the Process


It is surprising just how many directors don’t understand the importance of the role of HMRC when considering a Company Voluntary Arrangement (CVA). Although they know that the taxman will want money due to Her Majesty’s Revenue & Customs, it somehow doesn’t dawn on them that HMRC is, for all intents and purposes, a secured creditor. In fact, in many cases, HMRC is owed the greatest amount of money and thus becomes the main concern when wooing them into a CVA.

It may seem at the moment as though you are climbing a steep, uphill battle, but with the right strategies, even the taxman can be won over to your side. Here is how we approach it at Real Business Rescue along with some brief facts that should ease your mind during this stressful time.

The Role of HMRC and Secured Creditors in a Company Voluntary Arrangement (CVA)

One of the most important aspects of a CVA is the fact that your secured creditors must agree the terms of a CVA. However, it doesn’t stop there because there must be a consensus of at least 75 percent in terms of value, not creditor numbers.

Quite often your largest debt is to the taxman so you can see how HMRC would play such an important role! It stands to reason that if you are having trouble paying suppliers, rent and even payroll, you are probably late on PAYE and NIC as well!

The thing working in your favour is that government wants to get paid but they also recognise the value of keeping UK businesses afloat. This keeps workers in jobs and helps to stabilise the economy. We have successfully negotiated with HMRC so that they agree the terms of the CVA in most cases, sometimes with minor adjustments.

Creditors Can Have a CVA Revoked

It is especially important to choose your Insolvency Practitioner wisely because under some conditions, a creditor can apply to have the court agreed CVA revoked, or at the very least revised. Usually this is in terms of some irregularity in meetings or that said creditor feels as though they have been unfairly prejudiced within the agreed CVA.

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Experienced IPs such as Real Business Rescue know that any secured creditor who was entitled to be a party to the CVA can (and will!) challenge what they consider to be an unfair CVA. Amongst many other reasons for carefully choosing an Insolvency Practitioner, this is of prime importance. Not only can the agreed CVA be overturned, but it will greatly delay any progress in terms of turning a distressed business around.


In short, the role of HMRC and secured creditors is to agree the amount they will settle for, the timeframe in which they will be paid and of course, the ability to challenge an agreed CVA. The insolvency specialists at Real Business Rescue understand that you are already stressed by the inability to keep up with bills. You don’t need to be faced with a time-consuming challenge as well. Let us help you negotiate realistic arrangements with your creditors whilst ensuring that there are no material irregularities which would prompt a challenge. Call us on 0800 644 6080 to set up a free consultation. It is our goal to assist you in understanding everyone’s role in a Company Voluntary Arrangement.


Who we help

  • Company Directors
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Jonathan Munnery
Andrew MacKenzie
Julie Palmer
Thomas Mckay
Keith Tully
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