Insolvency technical update: February 2025

Read our latest insolvency technical update – your round-up of the recent developments in insolvency.

Changes to AML high-risk third countries list

Following the recent Financial Action Task Force (FATF) plenary session, the list of high-risk third countries under UK AML legislation has automatically changed as follows:

Countries added: Laos (Lao People’s Democratic Republic) and Nepal.

Countries removed: Philippines.

The updated full list of countries is therefore:
Algeria, Angola, Bulgaria, Burkina Faso, Cameroon, Croatia, Democratic Republic of the Congo, Haiti, Iran, Ivory Coast, Kenya, Laos, Lebanon, Mali, Monaco, Mozambique, Myanmar, Namibia, Nepal, Nigeria, North Korea, South Africa, South Sudan, Syria, Tanzania, Venezuela, Vietnam and Yemen.

Firms should ensure that checklists are updated, existing relationship KYC is reviewed and firm wide risk assessment and policies updated as appropriate.

Update on new Insolvency Service case management system

The Insolvency Service have issued an update on the timelines to introduce their new case management system, INSSight, and how this will impact IPs. The transition from the current system to INSSight will begin in late March, with the new system operational from April onwards. More information is available in this Insolvency Service Bulletin.

HMRC Insolvency Guidance

HMRC are changing the way they are publishing their Insolvency Guidance. Instead of issuing by email they will be published on gov.uk as Insolvency Practitioner bulletins. Sign up to receive notifications as new bulletins are published.

Companies House changes

As part of new powers and changes being brought in under the Economic Crime and Corporate Transparency Act 2023, Companies House are making several changes. These include the requirement for directors, officers and persons with significant control to undertake identity verification (IDV). This is due to be introduced on a voluntary basis from 25 March 2025 with mandation coming later in 2025.

Alongside this, Authorised Corporate Service Providers (ACSP’s) will be able to register as Companies House agents to undertake IDV. At a later date, Companies House will require those filing documents on behalf of third parties to be registered as ACSPs. This will include insolvency practitioners filing on behalf of entities over which they are appointed.

More information is available in ICAS articles on New identification requirements coming from Companies House and What you need to know about becoming an Authorised Corporate Service Provider.

Companies House sharing of non-public information

New rights have been given to the Registrar of Companies to allow the sharing of non-public information with insolvency practitioners (IPs). Find out more in this article. 

The Payment and Electronic Money Institution Insolvency (Scotland) (Amendment) Rules 2025 

The above rules came into effect on 26 February to correct various defects in The Payment and Electronic Money Institution Insolvency (Scotland) Rules 2022. These set out the procedure in Scotland for the payment institution special administration process and electronic money institution special administration process under the Payment and Electronic Money Institution Insolvency Regulations 2021.

Special administration of water companies

The Water (Special Measures) Act 2025 has received Royal Assent and amendments to section 25 of the Water Industry Act 1991(power to make special administration order on winding-up petition) come into effect on 24 April 2025. 

Dear Trustee - Changes to trustee accounts process

The AiB has issued a Dear Trustee letter advising of changes to their process and requirements for trustees submitting period accounts in bankruptcies. The new processes took effect for all accounts submitted on or after 1 March 2025. The changes include a requirement to submit a scheme of division if sufficient funds (defined as 5p in the £) exist for interim dividends. In cases with funds, if the trustee is not ready to pay a dividend or considers it is not cost effective to do so then a trustee must make a request to postpone the payment of a dividend and provide an explanation in support of this request. 

For all accounts submitted an update on case progression, including debtor compliance and asset realisation, will be required.

Chartered Accountants Ireland cease as insolvency regulator

Chartered Accountants Ireland officially ceased to be a recognised professional body for insolvency in Northern Ireland from 19 February 2025 after asking to have their authorisation revoked. The Insolvency Practitioners (Recognised Professional Bodies) (Revocation of Recognition) Order (Northern Ireland) 2025.  

Changes to ICAS technical helpdesk

As part of our drive to improve service delivery and member support experience, we have changed the internal system we are using to respond to technical queries. This change will allow us to be more responsive and provide a consistent experience for technical queries as well as proving us with a greater oversight of queries raised. Members and those within member firms can raise their query with us by following the 'Contact our technical helpdesk' link on the ICAS practice and regulation support page.

AML Regulatory Actions Guidance

New guidance has been issued setting out how ICAS will apply regulatory penalties where non-compliance with AML responsibilities is found. The new guidance will be applied by the relevant ICAS committees from 7 April 2025. Supervised firms are encouraged to review the eight categories of non-compliance in the guidance and take immediate action if there are any areas whether further work is required to achieve compliance. Further information on the guidance and its background is available in this article.

Data protection registration fee increases

The annual fee payable to the Information Commissioner by data processors has increasing by 30% from 18 February. The new fee levels payable are:

• Tier 1 (micro organisation) £52
• Tier 2 (small and medium organisation) £78
• Tier 3 (large organisation) £3,763

Legal update

In two recent English High Court decisions (MTA Personal Injury Solicitors LLP and Wejo Limited), both handed down by HHJ Cawson KC, the courts set out clearly their expectations of office-holders, as fiduciaries, and their requirements to produce a sufficient and proportionate level of information to justify the level of fees being claimed. (analysis via Brodies)