It has recently become apparent that insolvency practitioners and their advisers should be particularly vigilant when dealing with Customs & Excise on behalf of companies in administration. This will become increasingly important once the provisions of the Enterprise Act 2002 removing debts due to Customs & Excise from the categories of preferred creditors come into force.
Rule 4.90 of the Insolvency Rules 1986 provides that where, before the company goes into liquidation, there have been mutual dealings between the company and a creditor, an account shall be made of what is due by each party to the other, in respect of those mutual dealings, and the sums due from one party shall be set off against the sums due from the other.
