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HMRC internal manual

Debt Management and Banking Manual

Summary Proceedings (Sc): Insolvency on diligence

Enterprise Act 2002

The Enterprise Act 2002 made important changes to insolvency law.

These changes fall into four categories

  • corporate insolvency (notably the company administration procedure)
  • abolition of crown preference
  • individual insolvency


  • the reform of the financial regime of the Insolvency Service.

Immediate action on receipt of insolvency notification

On receipt of a notification of an insolvency* you must not under anycircumstances start or continue proceedings for that case.

Where decree has not been granted but the case has been registered with the court, as wellas withdrawing the case from summary cause action (summary proceedings) you should

  • notify the court in writing
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)


  • arrange for a claim to be lodged as appropriate.

*Note: In this instance “Insolvency” means any sequestration,company liquidation (both compulsory and voluntary winding-up), administrativereceiverships/receiverships, trust deeds, company schemes of arrangement, companyadministrations.

Crown preference

With effect from 15 September 2003 Crown preference was abolished with regard to allformer Inland Revenue and HM Customs and Excise debts.

Crown preference however remains for any such debt where the relevant date is prior to 15September 2003.