{"id":12685,"date":"2011-12-02T12:11:59","date_gmt":"2011-12-02T12:11:59","guid":{"rendered":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/?p=12685"},"modified":"2019-12-12T12:15:50","modified_gmt":"2019-12-12T12:15:50","slug":"will-hmrc-approve-an-iva","status":"publish","type":"post","link":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/will-hmrc-approve-an-iva\/","title":{"rendered":"Will HMRC approve an IVA?"},"content":{"rendered":"\n

The Attitude of HMRC to Proposals for Individual Voluntary Arrangements<\/h2>\n\n\n\n

When a self employed trader becomes insolvent and seeks to offer \nproposals to creditors for an Individual Voluntary Arrangement (IVA), HM\n Revenue & Customs (HMRC) is highly likely to be one of those \ncreditors. The self employed insolvent trader is likely to have \nliabilities for tax, national insurance, VAT or overpayment of tax \ncredits. The approach that HMRC takes may be critical to the approval or\n rejection of such an IVA proposal, particularly when the HMRC debt \nexceeds the 25% threshold of the total debt owed to the creditors who \nare likely to vote. It behoves the insolvent trader therefore to \nconsider carefully those factors which HMRC deem to be important in \nreaching their decision as to whether to vote for or against the \ntrader\u2019s proposal or even to abstain from voting entirely.<\/p>\n\n\n\n\n\n\n\n

If the HMRC claim is of low value, currently less than \u00a38,000, and trading has ceased or the HMRC share of the vote is statistically insignificant then it is likely that HMRC will abstain from voting for or against the IVA proposal.<\/p>\n\n\n\n

For trader proposals, the voting decision will be based on the \ninformation contained within and supporting the IVA proposal. It is the \npolicy of HMRC to respond, advising of their voting intentions, within \nseven working days of receipt of the IVA proposal. They make it clear \nthat they do not want to have to consider any proposal more than once. \nThey expect every such IVA proposal to contain a commercial offer of \nrepayment that is both optimal and achievable.<\/p>\n\n\n\n

HMRC will routinely reject IVA proposals where the offer is \nconsidered to be substandard, a statement of household income & \nexpenditure is not provided, a cash flow statement for the proposed term\n of the IVA is not provided or insufficient financial and other \ninformation is provided to satisfy HMRC\u2019s acceptance criteria.<\/p>\n\n\n\n

\"HMRC<\/figure>\n\n\n\n

Even where voluntary payments are not a feature of the IVA proposal, these criteria apply. Where additional information, not contained in the original IVA proposal, is supplied in good time to allow for its consideration, HMRC may alter its vote, but this should not be assumed.<\/p>\n\n\n\n

From a workload perspective, HMRC will give priority to new IVA \nproposals and will not chase up by telephone information that should \nhave accompanied the IVA proposal in the first place. In the event of \nthe adjournment of the Meeting of Creditors (MOC), HMRC oppose \nadditional costs being charged for a second meeting due to the late \nsupply of information.<\/p>\n\n\n\n

HMRC will routinely support IVA proposals where debtors are honest in\n their financial disclosure, make an optimised and achievable offer to \ncreditors, clearly make provision for payment of all future HMRC debts \non time, treat all creditors within the same class equally and where \nthere are no exceptional reasons for rejection by HMRC.<\/p>\n\n\n\n

HMRC expect IVA proposals to contain the debtor\u2019s true position with \nregard to assets and liabilities ensuring in particular that the open \nmarket value of assets is not materially different from those in the IVA\n proposal, that the values being placed upon liabilities are not \nmaterially from those in the IVA proposal and that the IVA proposal has a\n real prospect of working.<\/p>\n\n\n\n

HMRC may discuss or seek clarifications or explanations prior to the \nMOC any apparent differences between HMRC\u2019s prior knowledge of the \nfinancial position of the debtor and the position outlined in the IVA \nproposal. They may also seek to discuss and have clarified projected \nincome & expenditure statements, provisions made for payment of all \nstatutory liabilities as they fall due within the lifetime of the IVA, \nhistorical information already disclosed in the IVA proposal, financial \ninformation that may have been excluded and any other confidential \ninformation that influences its decision.<\/p>\n\n\n\n

In summary, the insolvent trader should ensure full and truthful \ndisclosure of his or her financial position and seek to get it right \nfirst time so as to avoid wasting HMRC\u2019s valuable time and resources in \nclarifying matters in the lead up to the MOC. It goes without saying \nthat the IVA proposal should be optimized and achievable, containing all\n the necessary supporting financial information and providing realistic \nprojections covering the expected term of the IVA. <\/p>\n","protected":false},"excerpt":{"rendered":"

When a self employed trader becomes insolvent and seeks to offer proposals to creditors for an Individual Voluntary Arrangement (IVA), HM Revenue & Customs (HMRC) is highly likely to be one of those creditors.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-12685","post","type-post","status-publish","format-standard","hentry","category-iva-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12685","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=12685"}],"version-history":[{"count":1,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12685\/revisions"}],"predecessor-version":[{"id":12691,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12685\/revisions\/12691"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=12685"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=12685"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=12685"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}