Hauliers set to get a better deal on debts
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.JL Hauliers owed money when a company goes into receivership may get a better deal under a Treasury plan to revamp the insolvency law. Currently creditors of failed companies don't get a penny until the government has taken its share for any outstanding taxes or VAT. This means that while the Treasury is usually paid, other creditors get little or nothing of what they are owed.
Along with a proposal to remove the Crown's preferential right to recover unpaid taxes, Chancellor Gordon Brown is suggesting changes to the way administrative receiverships are handled. The move is designed to reduce the number of business failures and get more money for creditors when companies do go to the wall.
The proposals are outlined in a document Enterprise and the Productivity Challenge, published earlier this week. They are part of a series of measures announced by Brown which are designed to make UK business more competitive—he is promising a White Paper on the subject in July.
The document also sets out proposals to glve the competition authorities greater powers to investigate price fixing. This could affect fuel or ferry prices by making it easier for the government to prosecute companies operating a cartel.
• Brown wants to end automatic fines for late payment of VAT for firms with a turnover of less than 1100,000. In future fines will only be levied after a letter is sent offering help and advice to sort out problems. There wit also be help and incentives to encourage businesses to send in VAT returns via the Internet and make their VAT payments electronically.