HMRC preferential creditor: top tips to avoid personal guarantee headache

With HMRC due to become a preferential creditor under insolvency procedures, Purbeck Insurance’s Todd Davison looks at what it means for business owners with personal guarantees

This December, a change to who gets paid in what order following an insolvency could put many owners and directors of small business who have signed a personal guarantee at increased risk of losing their home and other personal assets if the business fails. HMRC will become a preferred creditor in a business insolvency for certain HMRC debts, moving from sixth position to third in the list of creditors to be paid following a business collapse.

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