Insolvency Technical Update - March 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 will commence 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 and the action that IPs need to take to be prepared for the introduction of the new rules:
- HMRC guidance relating to CVL appointments (New)
- Statutory interest (New)
- SIP Amendments for New Scottish Insolvency Rules (New)
- 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
Table of Destination: Insolvency (Scotland) Rules 1986 to 2018 Rules
The AiB and Insolvency Service have jointly issued a Table of Destination setting out where provisions within the Insolvency (Scotland) Rules 1986 are contained within the relevant 2018 Rules.
Act of Sederunt (Rules of the Court of Session 1994 and Sheriff Court Rules Amendment) (Miscellaneous) 2019
Amendments to the court rules have also been made to reflect changes to the corporate rules and will come into effect on 6 April 2019.
ICAS Corporate Case Review Checklists
As a result of the new Rules to be introduced on 6 April 2018 the case checklists which have been made available to ICAS members are being updated. The opportunity has been taken to significantly revamp the checklists and move to a product which is capable of being completed digitally. The option to print a checklist will also remain.
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 will include 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 will be finalised for issue before the new rules come into effect but can be ordered now. I-ICRS 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.
HMRC, AiB and Insolvency Service Email Address Changes
As part of a cross government change to phase out the Government Secure Intranet (GSI) email addresses across government are being changed from 31 March 2019. This change affects all government departments including HMRC, the Insolvency Service and the AiB. Email addresses will no longer contain ‘.gsi’ in the domain address. So for example where an email address was previously sent to a @hmrc.gsi.gov.uk address it should now be sent to @hmrc.gov.uk
Insolvency Service Case Management System Updated
The Insolvency Service have updated their case management system, the first stage of which is to combine the entry access point for uploading information to the Redundancy Payments Service with the Director Conduct Reporting Service (DCRS). DCRS has been renamed to the Insolvency Practitioner Upload Service (IPUS). Updated guidance has been issued for the uploading of RP14 and RP14A through the new portal which was made live on 25 March 2019. The Insolvency Service have also provided an update on accessing and passwords for IPUS.
A Dear Trustee letter has been issued by the AiB setting out details, new information and documents which AiB requires trustees to complete and submit to AiB when they are to receive payment of any part of their trustee’s fees and outlays from either:
- a secured lender(s), for the sale of a debtor’s property on behalf of the secured lender(s) or
- from a third party, such as a creditor, or a member of the debtor’s family
Trustees must provide the requested information about such payments to AiB on and after 1 April 2019.
Common Financial Statement Trigger Figure Updates
Trigger figures within the Common Financial Statement which is used as the Common Financial Tool for Scottish personal insolvency processes have been updated and will become effective on 1 April 2019. The AiB have indicated that they will adopt a flexible approach for a period of one month after 1 April 2019 as a transitional arrangement for advisers updating their systems and processes.
AiB PTD Administration to Move to Fully Electronic Communication
The AiB have announced their intention for all PTD administration processes to move to a fully electronic basis through the ASTRA system from 4 November 2019. Further information is available in a Dear Trustee letter issued by the AiB.
The Insolvency Service issued in Dear IP 86 information in relation to the The Provision of Services Amendment (EU Exit) Regulations 2018 and The Insolvency (EU Exit) (Scotland) (Amendment) Regulations 2019 detailing amendments to the Insolvency Practitioners Regulations concerning IP insurance and devolved Scottish Insolvency provisions respectively in the event of a ‘no deal’ Brexit.
The Department for the Economy (NI) has issued Dear IP (NI) 47 setting out the position in Northern Ireland.
The Insolvency Service have also issued Dear IP 87 providing information in connection with the new Scottish corporate insolvency rules to take effect from 6 April 2019 and containing revised guidance in connection with Re-use of a prohibited name and the excepted cases.
Insolvency Service Winter Bulletin
The Insolvency Service have published the Winter edition of their Bulletin. This edition provides an update on Breathing Space, DRO, modern slavery, PPI and FE Special Administration regime.
Protected Trust Deeds Consultation
Nimmo v AiB  SC ABE 21 The Sheriff in Aberdeen has considered an appeal against a determination of the AiB in respect of a trustee’s remuneration in a sequestration, allowing a higher amount determined by a court reporter. A creditor must conjoin the appeal and not simply lodge answers if they wish to seek to reduce the trustee’s remuneration below the level already determined.
HMRC v Joint Administrators of Lehman Brothers International (Europe) The Supreme Court has upheld a Court of Appeal decision in favour of HM Revenue and Customs (HMRC) confirming that statutory interest is ‘yearly interest’ for tax purposes and should be subject to basic rate tax deduction on payment. (via Pinsent Masons)