Insolvency technical update – January 2023
Insolvency technical update – your round-up of recent developments in insolvency
Revised Statement of Insolvency Practice (SIP) 3.1 – Individual Voluntary Arrangements
A revised SIP 3.1 relating to Individual Voluntary Arrangements (IVAs) has been issued following the work of a Joint Insolvency Committee (JIC) working group and the approval of each of the Recognised Professional Bodies (RPBs).
The revised SIP 3.1 will apply to IVAs where the nominee is appointed on or after 1 March 2023. A comparison of the revised SIP 3.1 against the current (2014) SIP 3.1 is available along with a summary of the changes.
The Bankruptcy and Debt Arrangement Scheme (Miscellaneous Amendment) (Scotland) Regulations 2023
The above Regulations come into force on 6 February 2023.
The Regulations make amendments to the Bankruptcy (Scotland) Act 2016, the Debt Arrangement Scheme (Scotland) Regulations 2011 and the Bankruptcy Fees (Scotland) Regulations 2018 to:
- Remove the minimum debt level to access MAP bankruptcy:
- Extend the criteria for applying for a payment break in DAS to allow for a reduction in disposable income;
- Extend the application fee waiver for individuals who have been assessed by the Common Financial Tool as having no surplus income; and
- Increase the fee payable for the administration of sequestration where AiB is appointed trustee following the award of sequestration from £300 to £750.
An article looking at the Regulations in more detail is available here.
Tax clearance for MVLs
We have published an article setting out our position on insolvency practitioners closing MVL cases without tax clearance from HMRC, where delays are being experienced.
HMRC Insolvency Guidance - new mailbox for VAT deregistration confirmation
HMRC has re-issued guidance setting out details of a dedicated mailbox for insolvency practitioners to request VAT deregistration confirmation, which is now being trialled from 9 January 2023 until 9 April 2023.
A new mailbox has been put in place to resolve technical issues being experienced. The previous guidance issued on 21 December 2022 should therefore be disregarded. The new mailbox is email@example.com.
The mailbox is only to be used when a response has not been obtained through the normal channels and the HMRC deregistration contact form must be fully completed with all of the relevant information for each case.
Statutory debt solutions and diligence - policy review consultation: summary of responses
The Scottish Government has published a summary of responses to its recent consultation - Scotland’s statutory debt solutions and diligence: policy review response.
The consultation sought views on proposals for reforms to the Scottish statutory debt solutions and debt recovery mechanisms (diligence). Those proposals were put forward in response to recommendations arising from stakeholder-led policy reviews.
We responded to the consultation in October and a number of our comments are noted within the report.
Insolvency Service guidance: monitoring volume Individual Voluntary Arrangement and Protected Trust Deed providers
The Insolvency Service has issued revised guidance in relation to monitoring volume providers. It replaces previous guidance last updated and issued in 2019.
Dear IP156 has been issued by the Insolvency Service. The issue contains details of the revised SIP 3.1 and publication of volume IVA Provider Monitoring Guidance.
The Companies (Guernsey) Law, 2008 (Insolvency) (Amendment) Ordinance, 2020 ('the Ordinance')
The Ordinance and the Companies (Guernsey) (Insolvency Rules) Regulations, 2022 came into operation on 1 January 2023, following regulations made on 8 December 2022 by the Committee for Economic Development.
Resultant changes to insolvency law in Guernsey only apply to insolvency appointments that commenced after the changes came into force.
A previous ICAS article has been updated following the changes.
Insolvency Service guide to bankruptcy
The Insolvency Service’s guide to bankruptcy in England and Wales has been updated. The amount allowed for the reasonable replacement of a motor vehicle has been increased from £1,250 to £2,000.
Andrew Speight against Accountancy in Bankruptcy: The opinion of the Court on the debtor’s late appeal against the AiB’s review of the adjudication of creditor claims. The debtor’s appeal came almost 2 years after the statutory deadline and relied on section 211 of the Bankruptcy (Scotland) act 2016 to cure the defect in procedure.