Insolvency technical update - May 2016
A round-up of recent developments in insolvency.
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ICAS has become one of the first professional bodies to authorise insolvency practitioners under the new partial authorisation regime.
The new regime, introduced by amendments to the Insolvency Act 1986 and Insolvency (Northern Ireland) Order 1989 through the Deregulation Act 2015 and the Insolvency (Amendment) Act (Northern Ireland) 2016, allow IPs to be authorised only in respect of appointments to individuals or only in respect of appointments to companies.
Legal update – VAT on IBR not reclaimable
A Supreme Court judgement issued on 11 May highlights how drafting of engagement letters can have a significant impact on the ability of a company to recover VAT.
The court ruled in Airtours Holidays Transport Ltd v HMRC that Airtours were not entitled to reclaim as input tax VAT which it had paid on the cost of the Independent Business Review carried out as part of a restructuring exercise used to provide information to funders when securing finance.
Read a summary of the case and its implications.
Director conduct report system
The Insolvency Service online portal for the submission of director conduct reports has been amended from 11 May to allow IPs and their firms to register two new types of users. IPs shall now be able to register staff to draft online conduct reports for IPs to submit.
Service managers are “super users” within an IP firm. They are able to manage the access of all other staff within the firm. A Service Manager is able to view, access and update the cases of all those IPs who have added the Service Manager’s email address to their Settings screen.
They are not able to submit a conduct report on behalf of office holders.
Further information is available on the GOV.UK website.
The Insolvency Service is to stop publishing Scottish company director disqualifications in Edinburgh Gazette from 1 June.
The latest enforcement outcomes published by the Insolvency Service indicate that the average period of disqualification has increased in the last year.
Bankruptcy (Scotland) Act 2016
The Bankruptcy (Scotland) Bill, a Bill to consolidate over 30 years of personal bankruptcy legislation into one piece of legislation, received Royal Ascent on 28 April 2016.
The Bankruptcy (Scotland) Act 2016 is expected to become effective on 30 November 2016.
A technical update course is available to attend in:
- Edinburgh (26 October)
- Glasgow (9 November)
- Perth (10 November)
ICAS responses to review of PTD and DAS legislation changes
ICAS has responded to the recent Accountant in Bankruptcy reviews of Protected Trust Deed and Debt Arrangement Scheme legislation changes.
The responses highlight some shortcomings in the use of the Common Financial Statement as the Common Financial Tool being used for the calculation of surplus income in both PTDs and DAS.
A call has also been made for the Scottish Government to engage in an urgent dialogue with stakeholders on how heritable property, and particularly equity in dwellinghomes, should be dealt with throughout all debt relief procedures.
AiB Corporate plan
The Accountant in Bankruptcy have published their Corporate and Business Plan for 2016/17. The plan can be viewed here.
ICAS Insolvency & Restructuring Conference – Embracing the Future
This year’s conference, chaired by Gillian Carty, Partner at Shepherd and Wedderburn LLP and Donald McNaught, Partner in Johnston Carmichael's Restructuring team, will be held on 22/23 November.
The conference will consider the potential impact on the profession going forward and look at how best to tackle the challenging environment and maximise opportunities.
Top calibre, well respected speakers will present on a number of topics including the economic outlook, professional standards, technical and legal updates and more.
Scottish Government changes
Following the Scottish Parliament elections a number of changes have been made to Scottish Government positions.
Keith Brown MSP has been appointed Cabinet Secretary for the Economy, Jobs and Fair Work which includes cabinet responsibility for bankruptcy and the Accountant in Bankruptcy.
Paul Wheelhouse MSP takes over junior ministerial responsibility from Fergus Ewing MSP as Minister for Business, Innovation and Energy.