2 levy steps still apply after insolvency, HMRC says, a surprise for UK creditors and advisers

HMRC has issued a pointed reminder for levy-paying firms that fall into insolvency. “Tell HMRC an entity liable for the Economic Crime Levy has become insolvent,” says this HMRC guidance. It also says to “send any final returns to HMRC”. The surprise is practical: insolvency does not switch off the compliance duty by itself. That is immediately relevant for insolvency practitioners, accountants and creditors, because administrative loose ends can outlive the trading business.

What the source says

Published on 20 October 2026, the note applies to an organisation or individual already liable for the levy. HMRC’s message is narrow but important. The entity’s registration must be cancelled, and any final return still has to be filed. Before this note, the practical ambiguity was easy to see. When an entity enters formal insolvency, teams usually prioritise bank mandates, payroll, VAT, PAYE and creditor schedules. A specialist levy can slip down the list. HMRC has now removed that ambiguity for this levy. The change is not the levy itself, but the point at which HMRC considers the obligation finished.

What RecoupIQ’s data shows

RecoupIQ flags unresolved tax and levy registrations after a distress event as a compliance-gap signal. In our distress reviews, non-core compliance items are missed more often after a shock event than during ordinary trading stress. Those loose ends often appear when management focus narrows to payroll, wages, stock and secured lender demands. HMRC’s update confirms that the Economic Crime Levy belongs on that post-insolvency checklist. That matters because omissions often surface during later evidence requests, when the people who knew the file may have moved on. For creditors, that is a useful indicator of whether file control is tight or patchy.

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What this means for UK creditors

Credit teams should not assume that insolvency means every HMRC obligation has already been closed. If a debtor sits within the levy population, ask whether registration has been cancelled and whether the final return is ready. For trade creditors and lenders, the point is not the levy bill itself. It is the signal that a case may still contain unfinished statutory work. Ask the office-holder or adviser handling the file whether this step has been covered, and keep that answer with your recovery notes. The change here is simple: add Economic Crime Levy closure to your insolvency checklist now, not after a recovery stalls.

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