Seriously Polly?

The whole economy – and everyone in it – is imperilled by this debt, but at the sharp end is a trail of individual misery. There’s nowhere better to observe the human fallout than in the bankruptcy court, a modern block tucked away behind the gothic splendour of the high court in the Strand. Every day, in quiet rooms, judges rattle through lengthening lists of debt disasters.

Few debtors turn up, no doubt devoid of hope. The main creditor is the state, HM Revenue & Customs seeking unpaid VAT and income tax, or councils chasing council tax. The state has first call.

Umm, really?

Part 6 Final Distribution and application of assets in bankruptcy cases

36A.106 Abolition of crown preference and remaining preferential creditors

The implementation of the EA2002 reduced the creditors who were previously entitled to preferential ordinary unsecured status. The majority of unsecured creditors (including HM Revenue and Customs(HMRC), see paragraph 36A.107 and 36A.61) now rank equally as non-preferential ordinary unsecured creditors where the petition was presented on or after 15 September 2003.

Have I got this right? Govt is an ordinary unsecured creditor?

27 comments on “Seriously Polly?

  1. That made me chuckle. Almost all her examples are people being bankrupted by the taxman. She who cries for more taxes to be extracted from people…

  2. Few debtors turn up, no doubt devoid of hope. The main creditor is the state, HM Revenue & Customs seeking unpaid VAT and income tax, or councils chasing council tax. The state has first call.

    As David said, the irony is delightful. Polly complaining that the policies she so strongly supports is ruining lives? Do tell.

    Remember this the next time our Poll calls for higher taxes

  3. HMRC might still be preferred for PAYE but for the rest, it waits in the queue.

    Polly is 15 years out of date. (on this. Stuck in the 1950s on other things)

  4. So the solution to people bankrupted by the taxman is to vote in a government that will raise them even higher on small businesses prior to nationalisation?

    Joined up thinking as ever from a columnist who has arguably the unenviable distinction of being most wrong about every major issue of the past forty years. Admittedly not the most cretinous columnist with the likes of Jones, Valenti and Wilkinson now taking the mantle (Let’s leave well alone some of the occasional morons Tim links to) Did enjoy the ‘Happy new Year’ at the end of the article – unusual for someone that purblind and bigoted to do ‘irony’….

  5. The main creditor is the state, HM Revenue & Customs seeking unpaid VAT and income tax, or councils chasing council tax

    MOAR TAXES!

    Actually, Polly and the Borg’s solution would be for the private sector to pay much higher wages so that these people could then pay the eye-watering taxes justly due.

  6. Noel

    No, he doesn’t seem to wish to post comments on this does he. Neither does he seem interested in comments on Impress, Hacked Off or Max Mosley.

  7. How ungracious of you, Mr Worstall, to point out a factual error in one of Lady Polly’s articles.

    She didn’t get where she is today by writing about facts, I’ll have you know.

  8. Elsewhere in the feature:
    “Christmas tightens the screw, plunging families deeper into debts they can never escape.”

    And this is fault of Christmas? Do the families concerned have no agency?

  9. At bit off topic but I have no time for the bankruptcy courts. Personal anecdote but still:

    In the 90’s my family had all of our money embezzled. It went to court and we got fuck all back. Ok fair enough that’s the law.

    We then had our home repossessed because we couldn’t pay the mortgage. Ok fair enough that’s the law.

    So we’re ruined.

    Then the bank sells our house for well less than the market value. Fair enough it’s their house now.

    Then they come after my ruined and skint family after the remainder of the cash because they couldn’t be bothered to sell the house for the market value.

    Apparently that’s the law too. Fucking irresponsible bullshit.

  10. One of the consequences of that 2002 change appears to be the willingness of HMRC, and other state agencies, to stick the knife in first, in order to ensure they get something.

    And, IIRC, the government was warned about this at the time.

    But then, Blair/Brown.

  11. First claim on the assets / cash is the insolvency bod for their fees. Second claim is employees for unpaid wages and the secured asset creditors.
    After that is the normal creditors, of which HMRC is one for corporation tax / vat.
    After that, if anything is left, is shareholders.

    Or those businesses dissolved due to companies house dissolving them or through the spongebob plan (yes that’s its name) there is no insolvency and any assets remaining belong to the crown. Not the creditors.

  12. Oh and while HMRC often object to a company dissolving they also are reluctant to spend a few grand winding up when they don’t think they can get any money. Their objections eventually get ignored.

  13. “Christmas tightens the screw, plunging families deeper into debts they can never escape.”

    Sheer desperation at the bottom of the barrel. I mean, for fucks sake. This paper flits between sneers about commercialisation of Christmas and sob stories about people getting into debts “they can never escape” because they spend money they don’t have at Christmas.

    DONT FUCKING SPEND ALL THAT MONEY ON SHITE!

  14. Rob, its the fact people are able to spend money on what they choose rather than what their betters decide is good for them. Choice is a bad word in some circles.

  15. One of the consequences of that 2002 change appears to be the willingness of HMRC, and other state agencies, to stick the knife in first, in order to ensure they get something.

    Despite my contempt for HMRC’s incompetence, slovenliness and haughtiness, I’m somewhat sanguine about this one.

    Sure, if you commence bankruptcy proceedings or a winding up order against a small company that is teetering on the brink, then in most cases it will go under pretty much there and then, since their ability/will to recover is at rock bottom.

    Inevitably, people will lose their jobs and other creditors will not see their bills paid. All very sad.

    But, these things tend not to get any better by leaving them to fester, sometimes a killing blow delivered by a faceless government department is easier to deal with than the fact that old Mr. Jones who has run the light engineering firm since the 60’s is simply fighting a losing battle against the inevitable.

  16. Don’t get me started on limited liability. Its one of the most evil concepts ever designed. Its a licence for criminals to defraud people legally. The number of times I’ve seen local firms go bust, owing hundreds of thousands, often to lots of small contractors, who in turn may end up being bankrupted themselves, while the directors (who are also the shareholders) drive away in their big flash cars saying ‘Nothing to do with me’, and do the whole thing all over again, just under another name.

    Its a fine concept for the big boys further up the food chain, it shouldn’t be allowed where ordinary people have to trade with these sharks. IMO the shareholders of a company should not be the same people who run it, and if they are, they lose their liability. You take out thousands in pay and dividends over the years and run the company into the ground, then the creditors should be able to come and take that money back. Separate the ownership and the management – allowing the two to be the same is like allowing the fox the free run of the chicken coop.

  17. It is interesting that most jobbing professionals were relatively happy without limited liability under the old self employment route, but decades of attacks from the old agency regulations, composites, s360, etc., etc., have forced a large part of the workforce that was happy with the self-employment route to go the limited company route, regardless of how appropriate that was.

    I would love the simplicity of running my business as self-employment (which it really is), rather than have to go through inappropriate and idiotic nonsense for a Limited Liability that is of no interest / use to me anyway, but I am no longer allowed to.

  18. In reality the number of people taken to the bankruptcy court by creditors in Q3 2017 was 791 at a 20+-year low.
    Polly’s whole article is based on her inability to actually read the Insolvency Service’s publication.
    The total number of personal insolvencies had an upward blip in Q3 2017 but was still (on a seasonally-adjusted basis) nearly 30% down on the last full quarter of Brown’s Labour government.

  19. Why did they change the law on 2002?

    I thought that HMRC always came first because they didn’t choose to be a creditor. Everyone else is able to perform some due diligence.

    Also, people are more likely to collude to defraud the government.

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