Insolvency ― overview

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note provides an overview of the VAT implications of insolvency.

The note does not cover details of HMRC’s claim for VAT in an insolvency, which can be found in Notice 700/56 and De Voil Indirect Tax Service V5.187.

Insolvency ― introduction

Broadly, a business becomes insolvent when it doesn’t have enough assets to cover its debts or is unable to pay those debts (although in practice, there are a variety of types of insolvency). At this point, an official receiver or an insolvency practitioner may be appointed to take

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