Insolvency technical update – April 2023
Insolvency technical update – your round-up of recent developments in insolvency
The Bankruptcy and Diligence (Scotland) Bill (‘the Bill’)
The Bill was introduced to the Scottish Parliament on 27 April 2023.
The Bill contains provisions that broadly fall into three categories:
- An enabling power which will provide the platform for future regulations to introduce a “mental health moratorium”.
- Minor and technical amendments to bankruptcy legislation to provide clarity and improve the operation of bankruptcy processes, as set out in the legislation.
- Diligence measures to modernise existing debt recovery mechanisms and allow for more streamlined and improved processes.
The Bill will now be referred to the relevant Parliamentary Committees for consideration, with the Stage 1 debate expected to take place later this year.
We will publish an article looking at the Bill in more detail shortly.
Consultation on SIP 3.3 – Trust Deeds
A working group of the Joint Insolvency Committee (JIC) has been reviewing Statement of Insolvency Practice 3.3 – Trust Deeds (SIP 3.3) and are now inviting comments on the revised SIP.
The JIC decided to review the SIP because many of the issues which were relevant to the recently revised SIP 3.1 (Individual Voluntary Arrangements) apply equally to SIP 3.3, and because of matters raised within the context of the Scottish Parliament’s inquiry into Protected Trust Deeds and the subsequent Scottish Government response. SIP 3.3 was last issued in 2014.
The consultation closes on 10 July 2023.
HMRC Insolvency Guidance – Improvements to form VAT7
HMRC has issued guidance setting out amendments to form VAT7 - Application to cancel VAT registration.
HMRC Insolvency Guidance – VAT deregistration mailbox trial
HMRC has extended the trial of the dedicated mailbox for IPs to request VAT deregistration confirmation.
The trial has been extended until 2 May 2023 and HMRC is seeking views on its operation via a survey.
Insolvency Service bulletin
The Insolvency Service has published a bulletin advising of changes to its proof of debt report effective from 28 April 2023.
The update also sets out that the archive versions of pre-2020 issues of ‘Dear IP’ will soon be transitioned to the National Archives.
Applying to object to a company being struck off
Companies House has created an online objection service to simplify the process for submitting objections to a company being removed from the company register.
Regulation 9 of the Money Laundering and Terrorist Financing (Amendment) (No.2) Regulations 2022 became effective on 1 April 2023.
This has amended regulation 30A(1) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (‘the MLRs’) to extend the scope of the discrepancy reporting regime so that it’s an ongoing requirement and limit the requirement to report only “material discrepancies’’.
Regulation 30A of the MLRs requires relevant persons to report to the Registrar of Companies any discrepancies between the information they hold about the beneficial owners of companies, as a result of CDD measures, and the information recorded by Companies House on the public companies register. The requirement applies at the onboarding stage, “before establishing a business relationship”, therefore the amendment aims to enhance the accuracy and integrity of the register by making the obligation ongoing.
The Employment Rights (Increase of Limits) Order 2023
The above Order came into force on 6 April 2023.
For individuals made redundant on or after 6 April 2023, their weekly pay is capped at £643, and the maximum statutory redundancy pay they can receive is £19,290.
Guidance on redundancy payments published by the Insolvency Service has been updated to reflect the new statutory limits.
Petition by Blair Carnegie Nimmo and Alistair Mcalinden for an order to fix the former joint administrators’ remuneration and outlays: The Court of Session’s consideration of an application of the petitioners to fix their remuneration, following the creditors’ committee’s failure to reach a decision. The case has ultimately been remitted back to the appointed Court Reporter and to the Auditor of Court for further consideration of matters raised by Lord Braid.