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This response document confirms that the government will legislate in 2019 to 2020 to allow HMRC to make directors and other persons involved in company tax avoidance, evasion or phoenixism jointly and severally liable for tax liabilities that arise from those activities where the company becomes insolvent.
At Autumn Budget 2017 and Spring Statement 2018, the government announced that it would explore ways to tackle those who deliberately abuse the insolvency regime in trying to avoid or evade their tax liabilities, including through the use of phoenixism.
Please give us your views on how to tackle this abuse after reading the discussion paper ‘Tax Abuse and Insolvency’. This looks at several behaviours related to misuse of corporate insolvency - tax avoidance, tax evasion and repeated non-payment of tax - to identify potential solutions. These could include legislation, operational measures or other action.
This consultation only targets corporate bodies that exploit insolvency in this way and is not aimed at any particular size or type. Companies that enter insolvency for genuine commercial reasons will not be affected.