Insolvency Technical Update - April 2019
Insolvency technical update – Your round-up of recent developments in insolvency.
Insolvency (Scotland) (Company Voluntary Arrangement and Administration) Rules 2018 Insolvency (Scotland) (Receivership and Winding Up) Rules 2018
New Rules relating to corporate insolvency procedures commenced on 6 April 2019, bringing significant changes to the way in which these cases are administered. The following series of articles have been published to highlight the changes:
- Scottish Insolvency Rules are changing: Summary of changes
- CVL commencement under the Scottish Insolvency Rules 2018
- Communications under the Scottish Insolvency Rules 2018
- Decision making under the Scottish Insolvency Rules 2018
- Time periods under the Scottish Insolvency Rules 2018
- Claims under the Insolvency Scotland Rules 2018
- Companies House Forms - Insolvency Scotland Rules 2018
- HMRC guidance relating to CVL appointments
- Statutory interest
- SIP Amendments for New Scottish Insolvency Rules
Insolvency (Scotland) (Receivership and Winding Up) Rules 2018
Companies House Forms
Companies House have published forms which must be used when filing statutory information on Scottish insolvency procedures with the Registrar. Forms are provided for CVA, administrations, receivership, MVL, CVLs and court liquidations.
ICAS Corporate Case Review Checklists
As a result of the new Rules introduced on 6 April 2018, the case checklists which have been made available to ICAS members have been updated. The opportunity has been taken to significantly revamp the checklists and move to a product which is capable of being completed digitally. However, the option to print a checklist remains.
The new ICAS Insolvency Case Review System (I-ICRS) is an interactive and dynamic excel-based toolkit providing a tailored case review pack based on the case type selected. The enhanced system offers greater efficiencies in completion and a more robust compliance regime over the paper-based case review packs issued previously.
I-ICRS includes case reviews for CVAs and MVLs, which were not previously available from ICAS, with plans to incorporate case review checklists for England and Wales cases in future releases.
I-ICRS can be ordered now and will be available to firms under licence from ICAS at an initial cost of £1,500 exc VAT and an annual subscription (£250 exc VAT) after the first year which will include all relevant updates. A discount of 5% for each ICAS licenced IP in a firm will be applied.
Insolvency Practitioner Upload Service
The Insolvency Service have issued an update concerning issues affecting the Insolvency Practitioner Upload Service which was introduced in March 2019.
Notification of out of hours administration appointments to courts
The email address to notify the Court in England and Wales of an out of hours administration appointment has been amended. Notifications should be sent here.
Action taken by Poland's data protection authority highlighted the standards of transparency businesses must meet under the GDPR. The action has implications for Insolvency Practitioners where personal data is collected, but not directly from the individual to which it relates (e.g. from the insolvent’s records). (via Pinsents Mason)
Anti Money Laundering
ICAS has entered into a partnership with Amiqus ID which provides firms with an effective solution to AML compliance. The arrangement provides ICAS firms with preferential terms, low cost access to a digital solution to reduce the regulatory burden and comply with risk assessment and identity requirements under AML regulations.
Scottish Insolvency Statistics
The AiB has released official statistics reporting personal and company insolvencies for the fourth quarter (January to March 2019) of 2018-19 and provisional estimates for the 2018-19 financial year.
The provisional figures show that there were 966 corporate insolvencies (liquidations and receiverships only) in 2018-19, up from 884 the previous year. Provisional estimates also show that in 2018-19 personal insolvencies (bankruptcies and PTDs) increased by 20.5% to 12,779 from 10,602 in 2017-18.
National Living and National Minimum Wage Rates
The National Living Wage and National Minimum Wages rates increased from 1 April 2019 as follows:
|Year||25 and over||21 to 24||18 to 20||Under 18||Apprentice|
Dear IP 48 (NI)
The Department for the Economy in Norther Ireland have published Dear IP (NI) 48 covering Brexit legislation and an update on forthcoming IT system changes.
The Pensions Protection Fund have issued new guidance for pension scheme trustees. The guidance, Contingency planning for trustees, highlights preparations that can be undertaken when there is an increased risk of employer insolvency.
HM Revenue & Customs guidance on loan charges and insolvent employers
HMRC has issued guidance on how the loan charge in respect of PAYE/NI due on outstanding loans under disguised remuneration avoidance schemes at 5 April 2019 should be treated where the employer is subject to a formal insolvency process. The guidance sets out the steps that HMRC expect insolvency practitioners to take and provides information to assist IPs to respond to any Section 80 determination which may be issued by HMRC.
HM Revenue & Customs consultation 'Protecting your taxes in insolvency'
Following on from the Budget Statement by the Chancellor on 29 October 2018, HMRC have issued a consultation paper seeking views on the proposal that, from 6 April 2020, HMRC will become a secondary preferential creditor in respect of taxes collected from employees and customers. The consultation closes on 27 May 2019.
Protected Trust Deeds Consultation
The Scottish Government’s consultation on proposed changes to Protected Trust Deeds closed on 19 April 2019. ICAS has issued a response to the consultation in which a call is made for a clear policy decision to be made on the future direction of debt solutions in Scotland. ICAS has also reiterated its call for an early examination of issues surrounding heritable property in insolvency.
The Accountant in Bankruptcy has published a response to the ‘Building a Better Debt Arrangement Scheme’ consultation which launched on 31 October 2018. The amendments proposed are considered in an article published on icas.com.
Remit by AiB in the sequestration of VCY and the Advocate General for Scotland for and on behalf of the Commissioners for HMRC The applicability of statutory interest in the context of an application for recall of a sequestration was considered in a recent opinion issued by Edinburgh Sheriff Court. The judgment is useful in clarifying that that interest will not be automatically payable in recall cases where the debtor has applied for recall of a sequestration on the grounds that the debtor is able to pay their debts in full.
Wright and Ors v HMV Ecommerce Ltd & Anor  EWHC 903 (Ch)The High Court considered whether an electronic filing (e-filing) of a notice of appointment of administrators by directors outside of the court’s opening hours was valid. The court held that the filing was either not in breach of paragraph 8.1 of the Practice Direction – Insolvency Proceedings July 2018, which was ambiguous; or alternatively was a breach or defect, but one that did not invalidate the purported appointment.