Insolvency technical update: November 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) have been announced and will come 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Control of cases, has been revised while IGP 4 - Systems for control of accounting and other business records, has been withdrawn.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 comes 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.
HMRC VAT Notice 700/56
HMRC’s Insolvency Notice (VAT 700/56) has been updated at Section 25. This informs IPs how to tell HMRC of the insolvency of an entity which is registered for Plastic Packaging Tax purposes, including dealing with final returns and deregistration.
In addition, Section 27 has been added which sets out how IPs should tell HMRC about an appointment over a business which is registered for the Climate Change Levy, where to send final returns and how to cancel the registration.
ICAS AML Supervision Report
ICAS has published its AML Supervision Report for 2023/24. This sets out how ICAS and our firms play their part in the battle against economic crime. The Report includes several case studies and learning points for firms to consider which may assist them with improving their AML systems and avoiding regulatory issues.
AML Sanctions reporting obligations
The Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2024 has been laid in Parliament and includes an expanded definition of relevant firms subject to financial sanctions reporting obligations to now include insolvency practitioners. The new obligations take effect from 14 May 2025. HM Treasury and OFSI have published Guidance for insolvency practitioners on the reporting obligations.
Failure to prevent fraud
Failure to prevent fraud provisions under the Economic Crime and Corporate Transparency Act 2023 will come into effect on 1 September 2025. The provisions apply only to large companies. The Government has published guidance which sets out procedures that entities can put in place to prevent persons associated with them from committing fraud offences.
Scottish Court fees amended
Fees payable in Scottish Court processes changed from 1 November:
The Sheriff Court Fees Order 2024
The Sheriff Appeal Court Fees Order 2024
The High Court of Justiciary Fees Order 2024
Insolvency Service Case Management System rollout delay
The Insolvency Service have announced that the launch of the INSSight case management system is delayed until April 2025. The new IVA registration templates & CAU Forms 101, 103, 104, 105 & 109 released in July 2024 should remain unused until then
Legal update
Re PSL2021 Realisations Limited (In administration) In a Court of Session Opinion issued by Lord Braid, he considered an application for extension of an administration. The Opinion highlights several features, notably that applications for extension should not be taken for granted, that creditors must be given an opportunity to make their views known and that reports to creditors must provide meaningful information. (via BBM Solicitors).
