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Insolvency News, Issue 11 October 2022

Author: ICAEW

Published: 07 Oct 2022

In this issue of Insolvency News, the Insolvency Service confirms work it is undertaking to support you in relation to Bounce Back Loans, HMRC issues new updates including one regarding Director’s Loan Accounts and there is an opportunity to sign up for two live insolvency webinars. We also invite you to apply for a remunerated role on our Insolvency Licensing Committee and highlight two recent articles from our series on the Future of Insolvency.

Bounce Bank Loan – data sharing information

You may have recently received a letter from the Insolvency Service detailing work it is undertaking to support you in working through your appointments in relation to investigations into Bounce Back Loans (BBLs).

The Insolvency Service has identified c. 20k plus cases where entities have entered insolvency post receipt of a BBL from various financial institutions who offered these with a Government backed Guarantee during the COVID-19 period. 

Official Receivers have used this information to ensure that they are aware of the loan when dealing with cases and the Insolvency Service thought it would be prudent to share this information with IPs because it has received various reports of directors concealing the existence of a loan or not declaring it due to misinformation about the bank being able to claim from the British Business Bank. 

The Service has started a process of informing insolvency practitioners by email that they are appointed on a case where a BBL has been registered. The email is genuine and has been sent to support your SIP 2 obligations.

If you have any queries, please email them to IPregulation.section@insolvency.gov.uk.

ICAEW’s Quality Assurance Department would like to highlight that BBL investigations fall under insolvency practitioners’ remit and you shouldn’t assume the bank has correctly validated applications or subsequent use of funds.

This topic was discussed further in our Quality Assurance Roadshow update if you would like to listen again.

Process for Directors’ Loan Accounts (DLAs) written off as part of corporate insolvency procedures

HMRC has designed a new voluntary process to allow a more data driven and targeted approach to the issue of DLAs. This specifically applies in situations where DLAs are written off as part of a corporate insolvency procedure because the debtor cannot afford to repay the loan to the company. The process is entirely voluntary, and insolvency practitioners don’t need to use it if they don’t wish to.

HMRC guidance: Tax Clearance Requests in Members Voluntary Liquidations

HMRC has changed its process for giving tax clearance in members voluntary cases. You no longer need to post these requests to two separate areas of HMRC.

Creditor bankruptcy and liquidation petition deposits to rise

The Insolvency Service is introducing changes to the deposits paid to initiate creditor bankruptcies and compulsory liquidations. The petition deposit, the amount that needs to be paid up-front to seek an order, will be increasing in all cases where a petition is filed at court on or after 1 November 2022.

Your insolvency compliance review

Insolvency compliance reviews have been a requirement of ICAEW’s insolvency licensing regulations since 2005. Yet failure to carry out a compliance review is one of the most common breaches that result in a regulatory penalty from our licensing committee. 

Access guidance to support you and your staff in carrying out these reviews.

Resources include: frequently asked questions, helpsheets, forms and recently updated checklists.

You can also watch the recording and/or read the event Q&A from our webinar: Insolvency compliance, and SIP 11 annual review requirements.

Consolidate your insolvency licensing with ICAEW

You don’t have to be an ICAEW Chartered Accountant to qualify and be licensed as an insolvency practitioner (IP) with ICAEW. By choosing ICAEW as your single regulator, we can reduce the administrative burden and provide your current and future IPs with a wealth of benefits and support. 

ICAEW Certificate in Insolvency qualification

With an expected increase in corporate and personal insolvencies as the cost of living crisis deepens, there may never be a better time to upskill staff or train newcomers.

Would you like to renew your insolvency licence for 2023?

Please check your inbox for our 2023 licence renewal invitation. The deadline to confirm your licence for 2023 was 8 October.

Insolvency Licensing Committee vacancy

Find out more about the expertise we are looking for, remuneration rates for accountant and lay members, and how to apply.

The Insolvency Licensing Committee: fit and proper

We talk to members of the Insolvency Licensing Committee about its role in upholding the public interest, the value of healthy debate, and how insolvency practitioners can avoid coming before the committee.

Invitation: Sanctions webinar for insolvency practitioners 20 October 2022

Mike Green of the Office of Financial Sanctions Implementation team within HM Treasury will be discussing sanction-related matters that insolvency practitioners should be aware of.

Invitation: An insolvency round-up from the Quality Assurance Department (QAD) 

QAD will summarise the year’s common issues from monitoring reviews, relating to both personal and corporate appointments. 

They will also share current areas of regulatory or stakeholder interest, and practical tips to help avoid complaints or disciplinary matters. 

The event takes place on 5 December.

Webinar recording: Pension Issues for Insolvency Practitioners

A comprehensive round-up of all relevant pension scheme matters for insolvency professionals. This webinar will guide you through practical issues faced with company pension schemes and address statutory requirements and common issues such as working with Auto Enrolment providers, calculating unpaid pension contribution claims and determining which pension liabilities transfer under TUPE.

Insights: The future of the insolvency profession

The insolvency profession is poised to benefit from the growing need for business turnaround and insolvency expertise. However, the profession is at a crossroads due to regulatory upheaval and recruitment and skills challenges.

Insights: The future of company restructuring tools

Company Voluntary Arrangements and Restructuring Plans are important weapons in the insolvency practitioner’s armoury. Insolvency specialist Elaine Nolan explains how they look set to evolve following some seminal judgements.

Insights podcast: How to bring a business back from the brink

We explore the multifaceted role of the insolvency professional by hearing from both practitioner and client. Listen via your usual podcasts app