960PBankruptcy: priority for taxes.

(1) In this section—

“Act of 2010” means the Value-Added Tax Consolidation Act 2010;

“Act of 1988” means the Bankruptcy Act 1988;

“relevant period”, in relation to the distribution of the property of a bankrupt, arranging debtor or person dying insolvent, means the period of 12 months before the date on which the order for adjudication of the person as a bankrupt was made, the petition of arrangement of the person as a debtor was filed or, as the case may be, the person died insolvent.

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(2) For the purposes of subsection (1)(a) of section 81 of the Act of 1988, the amount referred to in that subsection is deemed to include capital gains tax.

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(2) For the purposes of subsection (1)(a) of section 81 of the Act of 1988, the amount referred to in that subsection is deemed to include capital gains tax and local property tax.

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(3) The priority attaching to the taxes to which section 81 of the Act of 1988 applies shall also apply to—

(a) any value-added tax, including interest payable on value-added tax in accordance with section 114 of the Act of 2010, for which a person is liable for taxable periods (within the meaning of that Act) which have ended within the relevant period,

(b) so much as is unpaid of an employer’s PAYE liability for the relevant period,

(c) amounts of tax ^[2]>deducted under section 531(1)^<[2][2]>due and payable under Chapter 2 of Part 18 and regulations made under that Chapter^<[2] which relate to a period or periods falling in whole or in part within the relevant period,

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(d) amounts of tax recoverable under Regulation 14 of the RCT Regulations which relate to a period or periods falling in whole or in part within the relevant period,

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(e) amounts of tax to which section 989 applies which relate to a period or periods falling in whole or in part within the relevant period,

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(f) amounts of tax to which section 990 applies which relate to a period or periods falling in whole or in part within the relevant period.

(4) In the case of any amount referred to in paragraphs (c) to (f) of subsection (3) for a period falling partly within and partly outside the relevant period, the total sum or amount is to be apportioned according to the respective lengths of the periods falling within the relevant period and outside of that period in order to determine the amount of tax which relates to the relevant period.

(5) In subsection (3)(b) “employer’s PAYE liability for the relevant period” means the amount determined by the formula—

(A + B − C) + D

where—

A is all sums which an employer was liable under Chapter 4 and the ^[6]>PAYE Regulations^<[6][6]>Income Tax Regulations^<[6] to deduct from emoluments paid by the employer during the relevant period,

B is all sums that were not so deducted but which an employer was liable, in accordance with section 985A and regulations under that section, to remit to the Collector-General in respect of notional payments made by the employer during the relevant period,

C is any amounts which the employer was liable under Chapter 4 and the ^[6]>PAYE Regulations^<[6][6]>Income Tax Regulations^<[6] to repay during the relevant period, and

D is any interest payable under section 991 in respect of the sums referred to in the meanings of A and B.”,