Local jobs could be safeguarded by the
one of the key findings of the Government’s recent Insolvency Review
which has been welcomed by the Eastern Branch of the Institute of
A key recommendation of the Review of
Company Rescue and Business Recovery Mechanisms means that the Revenue
and Customs will now consider allowing companies which cannot pay
their taxes to trade their way out of short term difficulties, rather
than simply shutting them down.
“It will help increase the chances of
rescuing local businesses facing financial difficulty, thereby
protecting local jobs,” says Stephanie Smye, chairman of the branch,
which represents over 900 company leaders in Cambridgeshire.
However, not all of the review has been
so positively received. The IoD’s Eastern Branch has expressed its
disappointment at the lack of progress in ending the right of the
Inland Revenue and Her Majesty’s Customs & Excise to be paid
ahead of other creditors (known as Crown Preference).
Stephanie Smye says: “The arguments for
changing Crown Preference are very strong and we will continue to
press for what we believe to be a fairer system for local businesses.
“If a company closes and fails to pay
its bills the knock-on effect for its suppliers can be devastating. By
insisting that taxes must be paid before other creditors get any money
the government may be forcing other firms into closure.”