Insolvency technical update – October 2021
Insolvency technical update – your round-up of recent developments in insolvency
HMRC – Debt Management processing update
The VAT426 Team has been testing a solution that should allow it to significantly increase the number of payments that can be made. If testing is successful, this solution will be immediately implemented, and that increase in payments out should make a significant difference. However, the VAT426 team have noted that the phone lines are very busy with progress chasing calls, and whilst HMRC understand and appreciate that IPs want to get updates on their claims, the volume of calls is slowing the level of progress the team can make with the increase in payments out. The team are currently on track towards processing cases within 30 days and are monitoring the situation closely with a view to re-assessing resources each week. They will be able to achieve this if the volume of progress chasing calls could be limited to urgent cases only, or, alternatively, escalated to the Insolvency Customer Service manager via ICAS.
The MVL Team are now raising new cases within Service Level Agreements of 30 days. If IPs have sent in any new cases prior to the start of September and haven’t yet heard from HMRC, those cases should be re-sent to the following address:
Debt Management – EIS NCL
HM Revenue and Customs
HMRC Insolvency Guidance – cancelling your VAT registration – form VAT7
HMRC has issued a reminder to IPs advising of the correct version of form VAT7 to be used when cancelling a VAT registration. IPs are currently sending HMRC numerous different versions of the VAT7 form and this is causing numerous issues.
Dear IP 138 has been issued by the Insolvency Service. The edition features details of recent HMRC updates, an update on RPS policy on directors’ claims, advice and guidance on cyber security and an update to the guidance on reviewing current IVAs.
ICAS regulatory status in the Republic of Ireland
ICAS has applied to the Irish Auditing and Accounting Supervisory Body (IAASA) for de-recognition of our authorisation as a Recognised Accountancy Body (RAB) and a Prescribed Accountancy Body (PAB) in the Republic of Ireland.
This change means that insolvency practitioners undertaking personal and corporate insolvency work in the Republic of Ireland may need to be authorised by a body other than ICAS for some appointments.
Joint and several liability notices
HMRC has issued guidance explaining what it will do when an individual has been connected with companies that have become insolvent with outstanding amounts owed to HMRC.
Option to tax land and buildings
Form VAT1614A, used to tell HMRC of an option to tax land or buildings, has been updated.
Temporary Insolvency Practice Direction
A new temporary Insolvency Practice Direction (MIPD 2021) came into force on 1 October 2021.
This practice direction will come into force on the lapse of the practice direction made on 30 June and remain in force unless amended or revoked by a further insolvency practice direction.
MIPD 2021 is intended to retain those parts of the previous Temporary Practice Direction that were not concerned with workable solutions for court users during the COVID-19 pandemic and which come to an end under SI at the end of September 2021. Those elements were concerned with permanent changes to the way insolvency business is handled in the courts, and include:
- the out of hours appointment of administrators,
- the provisions relating to making statutory decisions remotely, and
- the time of obtaining a moratorium,
which need to continue until such time (if at all) as they are addressed by substantive rule changes.
It applies to all insolvency proceedings throughout the Business and Property Courts in England and Wales, subject to any variations as directed by (in London) the Chief Insolvency and Companies Court Judge or (outside London) the relevant Supervising Judge.
COVID recovery consultation
A reminder that the Scottish Government has launched a consultation seeking views on legislative reform to support Scotland’s recovery from the COVID pandemic. ICAS recently responded to the consultation.
The consultation includes several topics of relevance for those involved in personal debt, insolvency and restructuring, including the permanency of the temporary COVID measures recently extended by the 2021 Act.
Consultation responses are invited by 9 November 2021.
UKFIU SARs Reform Programme Reporter Engagement Survey
The UK Financial Intelligence Unit (UKFIU) is conducting a survey to help it understand how well it is currently supporting AML SAR reporters and the impact of changes being made. Responses will be used to understand how UKFIU can continue to improve how it works with ICAS regulated members and the wider accountancy, audit and insolvency sectors.
Diligence against Earnings
The Accountant in Bankruptcy is hoping to lay regulations in Parliament during November which will uprate the current Diligence against Earnings tables. These tables are used to determine the amount deducted from a person’s wages if they are subject to an earnings arrestment and the amount of funds that are protected from arrestment if a person is subject to a bank arrestment.
The current tables and proposed uprated tables can be found here.
Financial Conduct Authority (FCA) - remote or hybrid working expectations for firms
The FCA has set out its expectations in relation to remote or hybrid working so firms can plan and continue to meet their regulatory responsibilities. FCA regulated firms should particularly note that any material changes to how the firm intends to operate may require to be notified to the FCA first.
The Payment and Electronic Money Institution Insolvency (England and Wales) Rules 2021
The above Rules come into force on 12 November 2021. The instrument introduces the rules for the special administration procedure established in the Payment and Electronic Money Institution Insolvency Regulations 2021.
James Stephen and another as joint liquidators of RFC 2012 plc for orders under paragraph 75 of Schedule B1 to the Insolvency Act 1986: The former joint administrators of the company were found to have breached their statutory duties as their actions fell below an "ordinarily competent" standard.
The Financial Conduct Authority v Carillion Plc: The High Court has ruled that the Financial Conduct Authority does not need the permission of the insolvency court to take regulatory action against a company in liquidation.
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