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Tighter rules introduced for pre-pack administrations HMRC is taking a tougher line on ‘phoenix’ businesses


New legislation came into force at the end of April 2021 for pre-pack administrations. It imposes a new eight-week window in which the assets of an insolvent business cannot be sold to a connected party without the consent of creditors, or a report from an independent evaluator. This report, which will be prepared by an


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BIFA utilises a network of regional consultants around the UK to act as a conduit for the dissemination of information and to seek local Member views on topics of interest. In light of current restrictions due to the ongoing COVID-19 pandemic, regional activity has moved online. Forthcoming virtual meetings are listed here.


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evaluator selected by the purchaser, will be made available to the creditors. Whilst the administrators are not bound by the report’s recommendations, they will have to justify their actions to the creditors if they decide not to follow the recommendations. Pre-pack sales can be a valuable restructuring option for businesses weighed down by debt,


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Regional Members’ meeting Heathrow


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encouraged to attend their regional meetings. However, pre-booking with the named contact is essential. See www.bifa.org/events


Date


which could otherwise be viable through a restructure but are not capable of continuing to trade whilst the administrator markets the business for sale. In these circumstances a quick sale is required to protect the business and employment, as otherwise the assets tend to realise only low values.


Impact on directors


These new rules will impact directors looking to restructure their businesses through a pre-pack and will seek to ensure they make the correct insolvency decisions. Until now, a purchaser had


Time Venue


Tue 13 July 1400 Videoconference Thu 22 July 1400 Videoconference


BIFA Contact Mike Jones


m.jones@bifa.org Mike Jones


m.jones@bifa.org


BIFA Young Forwarders’ Network Details of forthcoming events for the BIFA Young Forwarders’ Network can be found at www.linkedin.com/showcase/bifa-young- forwarders-network/?viewAsMember=true


July 2021


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