Insolvency technical update: August 2025

Read our latest insolvency technical update – your round-up of the recent developments in insolvency.

Code of ethics for insolvency practitioners

A revised code of ethics for insolvency practitioners has been issued and will come into effect on 1 October 2025. The revisions relate primarily to professional behaviour, role and mindset and technology.

Insolvency Guidance Paper 5 – Dealing with complaints

The Joint Insolvency Committee together with the Recognised Professional Bodies – ICAS, ICAEW and IPA - have approved and issue updated guidance to insolvency practitioners on dealing with complaints, which will come into effect on 1 October 2025.

The principal revisions to IGP 5 involves the introduction of a more hierarchical structure outlining general considerations and more detailed recommended practical steps to be taken by IPs.

Regulatory position statement on conversion of MVLs 

Following the recent High Court decision in Noal SCSp & Ors v Novalpina Capital LLP & Ors, ICAS, ICAEW and the IPA (the RPBs) have considered the regulatory approach to be adopted in relation to member voluntary liquidations (MVLs) which breach the “12-month rule”. The RPBs expectations and position is set out in this statement.

HMRC Insolvency practitioner bulletin 7 (2025): Pre-Pack Sales insolvency 

This bulletin explains why a new Pay As You Earn (PAYE) scheme is required, who’s responsible for the PAYE scheme in insolvency and how to set up a new PAYE scheme.

HMRC Insolvency practitioner bulletin 8 (2025): Members Voluntary Liquidation (MVL) and Notices of Intended Dividends (NOIDs) 

This bulletin explains HMRC’s expectations for the proportionate and appropriate use of 
Notices of Intended Dividends (NOIDs) in Members Voluntary Liquidations (MVLs).

HMRC Note: Dedicated mailbox for invoice submissions 

HMRC are experiencing issues with invoices being sent directly to individual email inboxes. This has resulted in invoices not being settled by the payment due date.
 
To mitigate this risk and ensure timely settlement of invoices, they have requested that invoices be directed to the dedicated mailbox only: EISinvoicesdebtmanagement@hmrc.gov.uk
 
The mailbox is specifically managed solely for invoice-related correspondence and ensures that invoices are processed efficiently and within the required timeframes.

Advance notification of redundancies - HR1

The Insolvency Service have announced that form HR1 will be moving to digital submission only. From early September 2025 it will be possible to submit the HR1 form digitally via gov.uk and from 1 December 2025 paper based forms will not be accepted.

AiB Notes for Guidance (common financial tool) update

Section 6.8 (Essential Expenditure) has been updated to reflect the increase in gas and electricity price cap effective from 1 October 2025. The limit for which no supporting evidence is required for utility spend is increased from £143 to £146 pm from 1 October to 31 December 2025.

Insolvency court reporters - Sheriffdom of Glasgow and Strathkelvin at Glasgow 

Sheriff Principal Anwar is inviting applications suitably qualified individuals interested in appointment to the office of Court Reporter in relation to insolvency processes for the Sheriffdom of Glasgow and Strathkelvin at Glasgow. Applications should be submitted on or before 19 September 2025.

Reporters are appointed by the court to examine the financial records of liquidators or other insolvency office holders and to provide the court with an assessment of the remuneration and outlays which should be awarded by the court. When necessary, they may be required to attend court and explain their assessment.

Applicants must be qualified insolvency practitioners who have worked in the field for at least 10 years. Remuneration will be by way of fees charged to the insolvent estate.

Interested parties should apply in writing addressing their correspondence to Joanna Healy, the Sheriff Principal’s Secretary [jhealy@scotcourts.gov.uk].

Applicants should provide:

1. A curriculum vitae describing their qualifications and their experience/expertise relevant to the role of reporter together with any previous experience of court appointments.
2. A copy of their Insolvency Permit.
3. A note consisting of no more than 500 words explaining how they’ll approach the role of reporter, if appointed. Applicants may wish to address the following matters.

1. 1. Objectivity – certain factors may threaten objectivity (such as established business and/or personal relationships and/or competition between insolvency practitioners). How will the applicant maintain objectivity and integrity?
   2. Delegation – in what circumstances will it be appropriate for a reporter to delegate work to assistants?
   3. Concerns – court reporters are expected to draw to the court’s attention any concerns which they might have as to the conduct of the insolvency process. What type of concerns should properly be raised with the court? Please provide real or hypothetical examples.

Up to five appointments will be made. The details of those who have been selected for appointment will be shared with us, the sheriff clerk and the Accountant of Court who’ll be invited to advise if there is any reason why the applicant cannot be appointed.

Successful candidates will be appointed for a three-year period.

Legal update

Petition of Nicholas Parkin for an order to wind up Ayres Wynd Developments Limited In a recent decision of the Outer House of the Court of Session, Lord Lake refused to grant first orders in a petition to wind up Ayres Wynd Developments Limited. The case acts as an important reminder on the use of caveats, the treatment of disputed debts in winding-up proceedings and the procedural discretion available to the court.