UK insolvency regime braces for Brexit and tax changes

Author: Olly Jackson | Published: 9 Nov 2018

A Brexit no deal will result in more expensive and time-consuming insolvency proceedings, and lead to companies streamlining operations. These issues could be exacerbated with HM Revenue and Customs (HMRC) set to be made the preferred creditor in business insolvencies, which could disincentive banks from lending to small and medium sized businesses and increase the already high risk of insolvencies.

Caroline Sumner, technical and education director at UK insolvency lobby group R3, said that if automatic recognition goes in the event of a no deal, it will become more expensive for companies and the process will be a lot more delayed.

"It’s going to be much harder to trace assets abroad, compared to now where it has been easy to set up subsidiaries," she said. "This could mean companies are streamlined and only based in the UK to avoid any confusion." 

The UK is currently part of...