Businesses are sidestepping tax bills amounting to tens of millions of pounds using an insolvency procedure that the government is considering banning.
That is the conclusion of an independent panel set up by the government to monitor the use of insolvency arrangements known as “pre-packs”. The Pre Pack Pool says some businesses have used the procedure to shed tax bills and pension liabilities.
“I have seen cases where the objective [of the pre-pack] was avoidance of liabilities,” said Stuart Hopewell, co-director of the Pre Pack Pool, introduced in 2015 to provide opinions on pre-packs involving sales to connected parties.
