Insolvency technical update: October 2023
We share our latest insolvency technical update – your round-up of recent developments in insolvency.
ICAS court reporter pack
An accompanying article provides a summary of updates to the pack.
HMRC insolvency VAT helplines survey
A reminder that HMRC has published a survey requesting feedback on experiences using the VAT helplines.
The survey comprises seven questions and should take no longer than five to ten minutes to complete. Responses are anonymous and question seven provides an opportunity to add additional comments.
The survey will run until 1 December 2023. HMRC will review the findings of the survey to assess the VAT helplines’ effectiveness and consider where improvements can be made.
Financial Conduct Authority (FCA) ban on debt packager referral fees
The FCA’s ban on debt packager firms being paid to refer customers on to other firms took effect on 2 October 2023.
The ban covers any commission, fee or any other financial consideration, received by a debt packager firm, directly or indirectly, from a debt solution provider in connection with the firm referring customers to a debt solution provider, or any other related services.
Our previous article has more information on the FCA’s changes to its rules.
Revised Statement of Insolvency Practice (SIP) 3.3 (Scotland) – trust deeds
A revised SIP 3.3 relating to trust deeds is effective for trust deeds signed on or after 1 November 2023.
A summary of the principal changes to SIP 3.3 can be found in our article on this topic.
Accountant in Bankruptcy (AiB) ‘Dear trustee letter’
The AiB has issued a ‘Dear trustee letter’ setting out its expectations of trustees when dealing with settlement payments by Glasgow City Council (and other bodies) in relation to equal pay claims.
Economic Crime and Corporate Transparency Act 2023
The Economic Crime and Corporate Transparency Bill achieved royal assent on 26 October 2023 and has become law.
The Economic Crime and Corporate Transparency Act 2023 (‘the Act’) is effectively the second part of a legislative package to prevent the abuse of UK corporate structures and tackle economic crime. It follows on from the Economic Crime (Transparency and Enforcement) Act 2022, which received royal assent on 15 March 2022.
The Act introduces measures to deliver:
- Reforms to Companies House.
- Reforms to prevent the abuse of limited partnerships.
- Additional powers to seize and recover suspected criminal cryptoassets.
- Reforms to give businesses more confidence to share information in order to tackle money laundering and other economic crime.
- New intelligence gathering powers for law enforcement and removal of nugatory burdens on business.
The UK government factsheets, which give details of the different measures contained in the Act, have now been updated to reflect changes during the legislative process prior to royal assent.
Most measures contained in the Act will not be introduced straight away. Many of the changes need secondary legislation, as well as the development of Companies House’s systems, before they're introduced.
However, some measures are anticipated to come into force in early 2024 including:
- Greater powers for Companies House to query and reject information that seems incorrect or inconsistent with information already on the register.
- Stronger checks on company names.
- New rules for registered office addresses, which will mean all companies must have an appropriate address at all times. Companies will not be able to use a PO box as their registered office address.
- A requirement for all companies to supply a registered email address.
- A requirement for all companies to confirm they’re forming the company for a lawful purpose when they incorporate. Every year, the company will need to confirm that its future activities will be lawful on their confirmation statement.
Insolvency (VAT Notice 700/56)
HMRC has amended VAT Notice 700/56 to update the email address for more information and advice about Members Voluntary Liquidations. Paragraph 1.3 has also been amended to show where the reproduction of the VAT return is stated in legislation.
The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023
The above regulations have been laid.
The regulations will extend the application of the insolvency regulations for the special administration procedure established by the Payment and Electronic Money Institution Insolvency Regulations 2021. This extension relates to institutions formed in Northern Ireland and limited liability partnerships formed in Scotland.
Public consultation – Digital assets and English insolvency law
The UK Jurisdiction Taskforce has launched a consultation on the material issues of concern to stakeholders in relation to the application of English insolvency law to digital assets.
ATE Farms Ltd v AW Estates Ltd (In Administration) & Ors: A recent Court of Session opinion considering whether the joint administrators breached their obligations under a deposit and exclusivity agreement by insisting on an indemnity that was not in the agreed heads of terms (via BBM Solicitors).
R (on the application of Palmer) (Appellant) v Northern Derbyshire Magistrates Court and another (Respondents): A Supreme Court appeal which has concluded that an administrator is not an “officer” of the company within the meaning of the phrase “any director, manager, secretary or similar officers of the body corporate”, as used in section 194 of the Trade Union and Labour Relations (Consolidation) Act 1992.