The Insolvency (Northern Ireland) Order 1989

Article 346.

SCHEDULE 4 N.I. THE CATEGORIES OF PREFERENTIAL DEBTS

Category 1: Debts due to Inland Revenue N.I.

F1 1.—(1) Sums due at the relevant date from the debtor on account of deductions of income tax from [F2 taxable earnings (as defined by section 10 of the Income Tax (Earnings and Pensions) Act 2003)] paid during the period of 12 months next before that date.

(2) The deductions referred to in sub‐paragraph (1) are those which the debtor was liable to make under[F2 regulations made under section 684 of that Act (PAYE regulations)], less the amount of the repayments of income tax which the debtor was liable to make during that period.

F1 prosp. rep. by 2005 NI 10

F2 2003 c. 1

F3 2.  Sums due at the relevant date from the debtor in respect of such deductions as are required to be made by the debtor for that period under section 559 of that Act of 1988 (sub‐contractors in the construction industry).

F3 prosp. rep. by 2005 NI 10

Category 2: Debts due to Customs and Excise N.I.

F4 3.—(1) Any value added tax which is referable to the period of 6 months next before the relevant date (which period is referred to as “the 6‐month period”).

(2) For the purposes of sub‐paragraph (1)—

(a) where the whole of the prescribed accounting period to which any value added tax is attributable falls within the 6‐month period, the whole amount of that tax is referable to that period; and

(b) in any other case the amount of any value added tax which is referable to the 6‐month period is the proportion of the tax which is equal to such proportion (if any) of the accounting reference period in question as falls within the 6‐month period.

(3) In sub‐paragraph (2)(a) “prescribed” means prescribed by regulations under the Value Added Tax Act 1983F5 .

F4 prosp. rep. by 2005 NI 10

F5 1983 c. 55

[F6 F7 3A.   Any insurance premium tax which is referable to the period of 6 months next before the relevant date (which period is referred to below as “the 6‐month period”).

For the purposes of this paragraph—

(a) where the whole of the accounting period to which any insurance premium tax is attributable falls within the 6‐month period, the whole amount of that tax is referable to that period; and

(b) in any other case the amount of any insurance premium tax which is referable to the 6‐month period is the proportion of the tax which is equal to such proportion (if any) of the accounting period in question as falls within the 6‐month period;

and references here to accounting periods shall be construed in accordance with Part III of the Finance Act 1994.]

F6 1994 c. 9

F7 prosp. rep. by 2005 NI 10

[F8 F9 3B.   Any landfill tax which is referable to the period of 6 months next before the relevant date (which period is referred to below as “the 6‐month period”).

For the purposes of this paragraph—

(a) where the whole of the accounting period to which any landfill tax is attributable falls within the 6‐month period, the whole amount of that tax is referable to that period; and

(b) in any other case the amount of any landfill tax which is referable to the 6‐month period is the proportion of the tax which is equal to such proportion (if any) of the accounting period in question as falls within the 6‐month period;

and references here to accounting periods shall be construed in accordance with Part III of the Finance Act 1996.]

F8 1996 c. 8

F9 prosp. rep. by 2005 NI 10

[F10 F11 3C.   Any climate change levy which is referable to the period of 6 months next before the relevant date (which period is referred to below as “the 6‐month period”).

For the purposes of this paragraph—

(a) where the whole of the accounting period to which any climate change levy is attributable falls within the 6‐month period, the whole amount of that levy is referable to that period; and

(b) in any other case the amount of any climate change levy which is referable to the 6‐month period is the proportion of the levy which is equal to such proportion (if any) of the accounting period in question as falls within the 6‐month period;

and references here to accounting periods shall be construed in accordance with Schedule 6 to the Finance Act 2000.]

F10 2000 c. 17

F11 prosp. rep. by 2005 NI 10

F12 F13 4.  The amount of any car tax which is due at the relevant date from the debtor and which became due within a period of 12 months next before that date.

F12 prosp. inserted by 2001 c. 9

F13 prosp. rep. by 2005 NI 10

F14 5.  Any amount which is due—

(a) by way of general betting duty[F15 , bingo duty or gaming duty], or

(b) under section 16 of the Miscellaneous Transferred Excise Duties Act (Northern Ireland) 1972F16 (general betting duty and pool betting duty recoverable from agent collecting stakes),F17 . . .

Sub-para.(c) rep. by 1997 c.16

from the debtor at the relevant date and which became due within the period of 12 months next before that date.

F14 prosp. rep. by 2005 NI 10

F15 1997 c. 16

F16 1972 c. 11 (NI)

F17 1997 c. 16

[F18 F19 5A.   The amount of any excise duty on beer which is due at the relevant date from the debtor and which became due within a period of 6 months next before that date.]

F18 1991 c. 31

F19 prosp. rep. by 2005 NI 10

[F20 F21 5B.   Any amount which is due by way of lottery duty from the debtor at the relevant date and which became due within the period of 12 months next before that date.]

F20 1993 c. 34

F21 prosp. rep. by 2005 NI 10

[F22 F23 5C.   Any amount which is due by way of air passenger duty from the debtor at the relevant date and which became due within the period of six months next before that date.]

F22 1994 c. 9

F23 prosp. rep. by 2005 NI 10

Category 3: Social security contributions N.I.

F24 6.  All sums which on the relevant date are due from the debtor on account of Class 1 or Class 2 contributions under [F25 the Social Security Contributions and Benefits Act 1992 or the Social Security Contributions and Benefits (Northern Ireland) Act 1992] and which became due from the debtor in the 12 months next before the relevant date.

F24 prosp. rep. by 2005 NI 10

F25 1992 c. 9

F26 7.  All sums which on the relevant date have been assessed on and are due from the debtor on account of Class 4 contributions under either of those Acts of 1975, being sums which—

(a) are due to the Commissioners of Inland Revenue (rather than to the Secretary of State or the Department of Health and Social Services), and

(b) are assessed on the debtor up to 5th April next before the relevant date,

but not exceeding, in the whole, any one year's assessment.

F26 prosp. rep. by 2005 NI 10

Category 4: Contributions to occupational pension schemes, etc. N.I.

8.  Any sum which is owed by the debtor and is a sum to which [F27 Schedule 3 to the Pension Schemes (Northern Ireland) Act 1993] applies (contributions to occupational pension schemes and state scheme premiums). N.I.

F27 1993 c. 49

Category 5: Remuneration, etc., of employees N.I.

9.  So much of any amount which— N.I.

(a) is owed by the debtor to a person who is or has been an employee of the debtor, and

(b) is payable by way of remuneration in respect of the whole or any part of the period of 4 months next before the relevant date,

as does not exceed so much as may be specified in an order made by the Department.

10.  An amount owed by way of accrued holiday remuneration, in respect of any period of employment before the relevant date, to a person whose employment by the debtor has been terminated, whether before, on or after that date. N.I.

11.  So much of any sum owed in respect of money advanced for the purpose as has been applied for the payment of a debt which, if it had not been paid, would have been a debt falling within paragraph 9 or 10. N.I.

12.  So much of any amount which— N.I.

(a) is ordered (whether before or after the relevant date) to be paid by the debtor under the Reserve Forces (Safeguard of Employment) Act 1985F28 , and

(b) is so ordered in respect of a default made by the debtor before that date in the discharge of his obligations under that Act,

as does not exceed such amount as may be specified in an order made by the Department.

F28 1985 c. 17

Interpretation for Category 5 N.I.

13.—(1) For the purposes of paragraphs 9 to 12, a sum is payable by the debtor to a person by way of remuneration in respect of any period if— N.I.

(a) it is paid as wages or salary (whether payable for time or for piece work or earned wholly or partly by way of commission) in respect of services rendered to the debtor in that period, or

(b) it is an amount falling within sub‐paragraph (2) and is payable by the debtor in respect of that period.

[F29 (2) An amount falls within this sub‐paragraph if it is—

(a) a guarantee payment under Part V of the Employment Rights (Northern Ireland) Order 1996 (employee without work to do);

(b) any payment for time off under Article 81 (time off to look for work or arrange training), Article 84 (time off for ante‐natal care) or Article 93 (time off for carrying out trade union duties etc.) of that Order;

(c) remuneration on suspension on medical grounds, or on maternity grounds, under Part VIII of that Order; or

(d) remuneration under a protective award made under Article 217 of that Order (redundancy dismissal with compensation).]

F29 1996 NI 16

14.—(1) This paragraph relates to a case in which a person's employment has been terminated by or in consequence of his employer going into liquidation or being adjudged bankrupt (his employer being a company not in liquidation) by or in consequence of—

(a) a receiver being appointed as mentioned in Article 50 (debenture‐holders secured by floating charge), or

(b) the taking of possession by debenture‐holder (so secured), as mentioned in Article 205 of the Companies Order.

(2) For the purposes of paragraphs 9 to 12, holiday remuneration is deemed to have accrued to that person in respect of any period of employment if, by virtue of his contract of employment or of any statutory provision, that remuneration would have accrued in respect of that period if his employment had continued until he became entitled to be allowed the holiday.

(3) The reference in sub‐paragraph (2) to any statutory provision includes an order or direction made under a statutory provision.

15.  Without prejudice to paragraphs 13 and 14— N.I.

(a) any remuneration payable by the debtor to a person in respect of a period of holiday or of absence from work through sickness or other good cause is deemed to be wages or (as the case may be) salary in respect of services rendered to the debtor in that period, and

(b) references here and in those paragraphs to remuneration in respect of a period of holiday include any sums which, if they had been paid, would have been treated for the purposes of the statutory provisions relating to social security as earnings in respect of that period.

Orders under Category 5 N.I.

16.  An order under paragraph 9 or 12— N.I.

(a) may contain such transitional provisions as may appear to the Department necessary or expedient;

(b) shall be subject to negative resolution.

Category 6: Levies on coal and steel production N.I.

17.  Any sums due at the relevant date from the debtor in respect of— N.I.

(a) the levies on the production of coal and steel referred to in Articles 49 and 50 of the E.C.S.C. Treaty, or

(b) any surcharge for delay provided for in Article 50(3) of that Treaty and Article 6 of Decision 3/52 of the High Authority of the Coal and Steel Community.