A new Inland Revenue/Customs and Excise unit is to be set up by the UK Government with the aim of considering proposed rescue plans, Company Voluntary Arrangements (CVAs), presented to it by businesses that find themselves in financial difficulties. The Government’s intention is to encourage companies to develop on the basis of responsible risk taking by providing more flexible insolvency procedures.
From April 2001 CVAs will be considered individually by the new unit. It will apply criteria similar to those applied by commercial creditors and use discretion in respect of debts where companies are working through a difficult period. Greater emphasis will be placed on accommodating business rescue plans that can be put into effect quickly with the aim of securing the survival of companies wherever possible. However, Crown Preference will not be abolished.