Insolvency technical update: December 2024
Read our latest insolvency technical update – your round-up of the recent developments in insolvency.
Insolvency Guidance Papers Updated
Changes to two Insolvency Guidance Papers (IGP) came into effect on 2 December 2024. IGP 1 - Control of cases, has been revised while IGP 4 - Systems for control of accounting and other business records, has been withdrawn. Further information is available in this ICAS article.
Changes to insolvency bonding requirements
New legislation, The Insolvency Practitioners (Amendment and Transitional Provisions) Regulations 2024, has been laid and came into effect on 1 December 2024 which changes insolvency bonding arrangements. Transitional provisions apply through to 1 January 2026. More information is available in this ICAS article. IPs should discuss with their brokers the impact of the changes in sufficient time for the renewal of their enabling bond.
The Bankruptcy and Diligence (Scotland) Act 2024 (Commencement No.1, Transitional and Saving Provisions) Regulations 2024
Changes to requirements before a protected trust deed can be entered into will take effect from 20 January 2025. The above regulations bring into legislative effect some provisions of the Bankruptcy and Diligence (Scotland) Act 2024 including the requirements for a trust deed information document to be provided to the debtor (in addition to the debt advice and information pack) and for a ‘cooling off period’ to consider the advice and information provided before signing the trust deed. Further information is provided in this article.
HMRC VAT Notice 700/56
HMRC’s Insolvency Notice (VAT 700/56) has been updated with section 5.6 (Repayments following Return submissions) amended to remove reference to repayments being issued to an insolvent entity's registered office.
The contact email address for enquires relating to bankruptcies has been updated in section 1.4. IPs should ensure their systems and contact address books are updated.
HMRC IVA proposal guidance
HMRC have added guidance for IPs on how to contact HMRC’s voluntary arrangements service and submit an IVA proposal. The guidance includes information for example about the conditions for supporting a proposal, how HMRC will support commercial offers, and the reasons why HMRC may reject a voluntary arrangement.
The Moveable Transactions (Scotland) Act 2023
Commencement regulations have been laid giving effect to changes to the assignation of and taking security over incorporeal moveables in Scotland from 1 April 2025. A previous article set out the changes in more detail.
The Moveable Transactions (Scotland) Act 2023 Amendment Regulations 2025 have also been laid in draft, which will amend the Act also on 1 April 2025. Importantly for insolvency practitioners, the amendments include a change to the definition of insolvency for the purposes of the 2023 Act in relation to assignation and statutory pledge, which now removes an assignor or provider’s application for an approved debt payment programme under section 2 of the Debt Arrangement and Attachment (Scotland) Act 2002 from those provisions.
The Moveable Transactions (Forms) (Scotland) Regulations 2024 sets out prescribed forms relating to the new statutory pledge while The Moveable Transactions (Register of Assignations and Register of Statutory Pledges Rules) (Scotland) Regulations 2024 introduces rules for the Register of Assignations and Register of Statutory Pledges established under the 2023 Act including for the making up and keeping up of the registers, procedures in relation to application for registration and correction, the form and content of any document or information to be used in relation to the registers and other matters under the 2023 Act.
Legal update
Linda Hastings as liquidator of Beath Retail Limited (in liquidation) for an Order under section 212 of the Insolvency Act 1986. A Sheriff Court judgment has emphasised that directors can be pursued for misfeasance and considered where the burden of proof lies where books and records have not been delivered to the office holder in an insolvency.
