With effect from 15 September 2003, when the Enterprise Act 2002 s 251 was brought into force, Crown preference was removed on a company entering into administration, so that unpaid National Insurance contributions rank as an ordinary unsecured debt for insolvency purposes.
Since the liquidator is treated as the employer (see E4.229), and the liability for contributions is his own rather than the company's, it is submitted that such contributions constitute 'necessary disbursements by the liquidator in the course of his administration', payable in priority to his remuneration1. In the case of a compulsory liquidation, the same applies if the liquidator has elected to continue the contract of service2.
If the liquidator makes a payment of accrued earnings, HMRC take the view that Class 1 contributions
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