Insolvency technical update – July 2023
By Steven Wood, Practice Support Specialist (Insolvency)
3 August 2023
We share our latest insolvency technical update – your round-up of recent developments in insolvency.
The Bankruptcy and Diligence (Scotland) Bill (‘the Bill’) – call for views
The Bill has been referred to the Economy and Fair Work Committee, which published a call for views in relation to the proposed changes. The call closed on 21 July 2023.
We previously published an article looking at the Bill in more detail and our response to the call is available to read here.
A call for views in relation to the Bill’s financial memorandum has also now been launched. The deadline to submit your views is 15 August 2023.
Implementation of two UNCITRAL Model Laws on insolvency
The UK government has published its response to its previous consultation on the implementation of two UNCITRAL Model Laws.
The response document sets out the government’s intention to:
- Implement the Model Law on recognition and enforcement of insolvency-related judgments, which deals with cross-border recognition of judgments that are associated with insolvency proceedings, while undertaking further work to ensure that legal clarity can be maintained and other principles of UK law will be supported rather than overruled.
- Implement the Model Law on enterprise group insolvency, which provides tools to manage and coordinate insolvencies within corporate groups, while respecting that each company within the group remains a separate legal entity.
FCA consumer duty
The FCA’s consumer duty came into force on 31 July 2023.
The consumer duty introduces a more outcomes-focused approach to consumer protection and sets higher expectations for the standard of care that firms give customers.
Its introduction will affect anyone providing regulated activities, such as debt counselling, under FCA supervision.
Guidance was issued earlier this year for firms whose primary business model is debt advice.
HMRC engagement with the insolvency profession
We jointly wrote a letter to Myrtle Lloyd with insolvency trade body R3 and the other Recognised Professional Bodies (‘RPBs’) raising concerns about HMRC's engagement with the insolvency profession, highlighting the negative effects that resource allocation is having on the profession and creditors.
Corporation tax and liquidations
In light of the new corporation tax rates from April 2023, we have set out the potential impact on companies in liquidation.
The Economic Crime (Anti-Money Laundering) Levy (Amendment) Regulations 2023 (‘the 2023 regulations’)
The 2023 regulations came into force on 28 March 2023 and amended the Economic Crime (Anti-Money Laundering) Levy Regulations 2022 to make further provisions relating to the economic crime levy.
We raised some issues with the 2023 regulations with the policy team at the Insolvency Service, and their clarifications can be read in our article.
HMRC insolvency guidance – filing of company tax returns
HMRC has issued a reminder about using the correct version of the company tax return (CT600) and filing requirements in insolvencies.
Insolvency Service guidance – amend a redundancy claim
The Insolvency Service has amended its guidance on correcting a mistake or updating the information provided in an online claim for redundancy.
A link has been added to an online form 'amend my holiday taken not paid'.
Insolvency Service director information hub
The Insolvency Service has launched a new online information hub to support company directors.
The hub hosts guidance and information on a range of business themes commonly faced by companies and aims to help company directors to push their business forward by being more aware of potential pitfalls.
Companies House
Companies House’s Edinburgh office is moving on 4 September 2023.
The new Edinburgh office will be closed to the public and companies registered in Scotland who want to file paper documents will now need to post them to the Cardiff office:
Companies House
Crown Way
Cardiff
CF14 3UZ
Companies House will accept post in the current Edinburgh office until 31 October 2023.
Vulnerable persons toolkit
We have created a vulnerable persons toolkit and guidance to support our member firms with the identification and support of vulnerable individuals who are clients, and to help take steps that allow you to act in that person’s best interests.
Legal update
DMWSHNZ Limited (in Liquidation) and another against Bank of Scotland plc: A Court of Session commercial action where the company and its liquidators are suing Bank of Scotland plc for breach of fiduciary and other duties arising out of a tax avoidance scheme.
S England and another v HMRC [2023] UKFTT 313 (TC): Our summary of a recent tax case which tested the rules on the write-off of loans to participators of close companies.
Register for the ICAS Insolvency and Restructuring Conference 2023