Insolvency technical update – May 2022
Insolvency technical update – your round-up of recent developments in insolvency
AML and counter-terrorist financing guidance approved by HM Treasury
HM Treasury (HMT) has now approved the anti-money laundering (AML) guidance for the accountancy sector previously published in draft format in September 2020.
HMT has also approved the associated Tax Appendix and Insolvency Appendix. CCAB have published explanatory notes which set out the main changes between the HMT approved guidance and the draft guidance previously issued.
An article has also been published by ICAS summarising the key changes when compared with the earlier draft.
Ukraine crisis and sanctions
Following the announcement that accounting services will form part of Russian sanctions, ICAS is awaiting detailed clarification and legislation before being able to advise Members further on the impact.
A resource hub has been created on the ICAS website to act as a central location for Members to access information on current sanctions and professional obligations, as well as the support and guidance available.
The sanctions regime continues to evolve and IPs should make sure that they have procedures in place to ensure they are aware of changes to sanctions and are able to evaluate whether any changes impact on their cases.
The financial sanctions list and scope of activities covered by trade sanctions continues to change frequently. IPs should ensure that they regularly review cases for any parties who may be the subject of sanctions. This will include not only the subject of the insolvency case itself, but also management, beneficial owners and creditors connected to the case.
Statement of Insolvency Practice (SIP) 9 reminder
ICAS draws its Members’ and Affiliates’ attention to the recent reminder published by the Insolvency Practitioners Association (IPA) about the responsibilities of insolvency practitioners under SIP 9.
This follows on from the Insolvency Service taking action to wind up Vanguard Insolvency Practitioners Limited (Vanguard) and three connected companies in the public interest. Vanguard was a volume Individual Voluntary Arrangement (IVA) provider, with the IVAs under its management supervised by an insolvency practitioner regulated by the IPA.
Updated Court fees will come into effect in Scotland on 1 July 2022 following the making of the following Orders:
- The Court of Session etc. Fees Order 2022
- The Sheriff Court Fees Order 2022
- The Sheriff Appeal Court Fees Order 2022
IPs should particularly note that a fee of £132 will be payable for lodging a notice of appointment or intention to appoint an administrator out of court under the Insolvency Act 1986 (IA86) or filing documents with the court to obtain a moratorium under section A3 of Part A1 of IA86. No fee was previously payable for these matters.
The Insolvency Service have issued a revised Form HR1 – advance notification of redundancies. The form no longer requires furlough information to be provided.
Insolvency (VAT Notice 700/56)
Insolvency (VAT Notice 700/56) has been updated with the following changes:
- Section 1.4 contact details updated.
- Postal address change in section 15.2 (Annual adjustment for partial exemption).
- Postal address changes in section 21.1 (submission of VAT forms).
- Postal address to send form VAT 833 has been updated.
HMRC Insolvency Guidance – insolvency customer services mailbox
HMRC has issued updated guidance for IPs surrounding its dedicated mailbox for insolvency-related cases.
It is stressed that until the contact form has been completed and attached, HMRC will be unable to progress queries.
Dear IP 146 has been issued by the Insolvency Service. The issue provides details of HMRC’s updated guidance on its dedicated mailbox for insolvency-related cases (see above) and a reminder that notice must be given to the Official Receiver of applications for the appointment of a provisional liquidator in England and Wales.
Standard Financial Statement (SFS) Spending Guidelines
The SFS Spending Guidelines have been uprated and the new figures published on the SFS website. The new figures will come into effect on 20 June 2022.
The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021
As reported last month the above regulations came into force on 1 April 2022 and introduced the Register of Persons Holding a Controlled Interest in Land (‘RCI’), which is maintained by the Keeper of the Registers of Scotland (‘the Keeper’).
The Keeper has confirmed that the obligation to notify and provide certain information (set out in the second entry of column 3 of the table in regulation 12) in the event of the winding-up or dissolution of a non-natural person (‘entity’) that is a ‘recorded person’ in term of the regulations. will be made via the online RCI system as a submission to update the RCI.
Registers of Scotland are currently developing the option to allow the online notification and it will be released shortly along with guidance.
Wider Review of Scottish Statutory Debt Solutions – stage 2 working groups
The Accountant in Bankruptcy has published reports from its stage 2 review of Scottish statutory debt solutions.
The reports have been developed by the members of three short-term working groups (including ICAS) established by the Scottish Government to consider a number of areas within Scotland’s personal insolvency and debt management regime that had been highlighted by stakeholders as potential areas where improvements could be made.
The three working groups focused on specific topics:
- Group 1 - Moratorium and Common Financial Tool
- Group 2 – Protected Trust Deeds
- Group 3 - Bankruptcy and cross-cutting issues
The reports will now be considered by the Minister for Public Finance, Planning and Community Wealth.
Insolvency Service guidance updates
The Insolvency Service (IS) has updated its guidance for customers who have been made redundant because their employer is insolvent and employers who need assistance paying redundancy pay. The update includes signposting to guidance for directors claiming redundancy payments.
IS has also made updates to its guidance is for company directors who are claiming redundancy related payments and the Redundancy Payments Service factsheet for employees made redundant by an insolvent employer.
Redundancy payments: Template for setting up a new case
The template used to request the set-up of a new redundancy case has been updated to remove the question around the Coronavirus Job Retention Scheme (CJRS).
Insolvency Service financial assistance scheme checklist
The insolvency Service has amended the checklist used when completing an application for financial assistance for making redundancy payments by removing the question about government funding schemes such as Bounce Back Loans (BBLs) and CJRS.
Debt Respite Scheme (Breathing Space) guidance
The Insolvency Service has updated its Breathing Space guidance for creditors and money advisers.
Statutory Debt Repayment Plan: Consultation
The government is consulting on draft regulations to introduce a new statutory debt solution known as the statutory debt repayment plan (SDRP) in England and Wales.
The government consulted on aspects of the SDRP in 2018/19, and published a response to that consultation in June 2019, setting out a basic blueprint for the scheme.
Insolvency Service – spring 2022 newsletter
The Insolvency Service has released the spring 2022 edition of its newsletter.
The edition includes a policy round up, details of a new Insolvency Board appointment and information about Insolvency Live! 2022.
Hashmi v Lorimer-Wing  EWHC 191 (Ch): A High Court decision that calls into question the validity of decisions made by a sole director in a company set up using the standard Model Articles, without amendment (via Lexology)