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    De-Regulation Bill - Clause 10: Partial authorisation of insolvency practitioners

    In response to the public consultation on the proposal relating to partial licensing of IPs, the Government has decided to go ahead with the proposal which is contained in the De-Regulation Bill.  The Parliamentary Debate on the De-Regulation Bill was held on 4 March 2014.  A summary of the responses with the Government response and the debate can be accessed at the links below.

    Strengthening the regulatory regime and fee structure for insolvency practitioners

    Following on from the 2010 OFT report into the market for corporate insolvency practitioners and last year's review of IP fees by Professor Elaine Kempson, the Insolvency Service launched a six-week consultation on proposals for changes to the IP fee charging structure in England & Wales and for an increase in the regulatory oversight powers of the Insolvency Service over the insolvency practitioner regulatory bodies.  The consultation closed on Friday 28 March 2014. The ICAS response can be accessed at the link below.

    Waste (Scotland)Regulations 2012


    The Waste (Scotland) Regulations 2012 (“the Regulations”) were passed by the Scottish Parliament on 9 May 2012. Provisions under the Regulations are being phased in over a number of years and the Regulations will be fully in force by 1 January 2016. This briefing deals only with those requirements which come into effect on 1 January 2014 and are likely to impact on office holders during the course of an insolvency appointment.

    Section 34 of the Environmental Protection Act 1990 (as amended) (“the 1990 Act”) lays out a number of duties with respect to the management of waste. Waste must be managed correctly by storing it properly, only transferring it to the appropriate persons and ensuring that when it is transferred it is sufficiently well described to enable its safe recovery or disposal without harming the environment.

    The Waste (Scotland) Regulations 2012 amended Section 34 to implement a number of actions in the Scottish Government's Zero Waste Plan. Under these amendments, holders of waste, including producers, have a duty to take reasonable steps to increase the quantity and quality of recyclable materials.

    "Duty of Care: A Code of Practice" (the "Code") explains these duties which apply to anyone who produces, keeps, imports or manages controlled waste in Scotland. The Code is made under section 34(7) of the 1990 Act. Under section 34(10) of the 1990 Act, the Code is admissible as evidence in court and the court shall take it into account in determining any questions to which it appears to be relevant. The intention is that the Code will assist the courts, when hearing cases under Section 34 of the 1990 Act, in determining whether persons subject to the duty took reasonable measures to comply with it.

    Enhanced duty of Care - 2 main offences 

    From 1 January 2014 two new offences were created:

    • Failing to take all reasonable steps to ensure the separate collection of dry recyclable waste, i.e. glass, metals, plastics, paper or card (including cardboard).
    • Failing to take all reasonable steps to ensure the separate collection of food waste produced by food business in non-rural areas.

    Separate collection of Dry Recyclables 

    From 1 January 2014 waste producers must “take all reasonable steps to ensure the separate collection of dry recyclables”. Metal, glass, plastic, paper and card (including cardboard).

    Waste producers include businesses and other public organisations of any entity type but excludes an occupier of domestic property in respect of waste produced on that property.

    “Separate collection” means each waste stream in a different container or sorted at the kerbside.

    Separate collection of Food Waste 

    What is a “Food Business” 

    “An undertaking, whether for profit or not, and whether public or private, carrying out any activity related to the processing, distribution, preparation of food.” 

    Food Businesses include: 

    • Restaurants
    • Cafés
    • Canteens
    • Guest Houses
    • Hotels
    • Public Houses that serve food
    • Shops that sell food
    • Supermarkets
    • Schools with canteens
    • Nursing Homes
    • Hospitals

    Exemptions from requirement to present food waste for separate collection 

    • Rural food business premises
    • Food businesses producing less than 5kg per week
    • Food waste that has arisen from international transport

    Hospitals are not required to comply with the food waste duty until 01 January 2016

    What is a Rural Area? 

    A searchable .pdf document entitled "Defining rural and non-rural areas to support zero waste policies" has been published. This contains all the rural postcodes which benefit from the exemption.

    Penalties for non-compliance 

    Any person who fails without reasonable excuse to comply with the duties imposed above shall be liable:

    a)     on summary conviction, to a fine not exceeding the statutory maximum (£10,000); and

    b)    on conviction on indictment, to an unlimited fine.

    De-Regulation Bill - Clause 10: Partial authorisation of insolvency practitioners

    The Deregulation Bill is currently passing through the UK Parliament. Contained within the Bill are a number of insolvency related matters including a provision to amend the Insolvency Act 1986 and allow IPs to be licenced to take only personal or only corporate appointments as well as the current ‘full’ authorisation. Written evidence has previously been submitted to a Joint Parliament/House of Lords Committee as part of a pre-legislative scrutiny of the Bill. As a result of that pre-legislative scrutiny, the Joint Committee recommended in its report that further consultation should be undertaken in relation to the partial licencing provisions.

    The Insolvency Service has therefore issued a consultation letter asking for comments to be submitted by 21 February 2014. You are encouraged to respond to the consultation. 

    BADAS Bill - Stage 2 amendments

    The Scottish Parliament will debate Stage 2 amendments to the Bankruptcy & Debt Advice (Scotland) Bill (BADAS) on Wednesday 22 January 2014.  Amendments to the Bill are to be lodged by MSPs by noon on Friday 17 January 2014. 

    ICAS and R3 STC have issued jointly to members and substitute members of the Economy, Energy and Tourism Committee (EET) a briefing paper containing proposed amendments.  It is hoped these will be lodged by some of the MSPs on our behalf. 

    David Menzies and Eileen Blackburn (Chair, R3 STC) have been invited to meet the Convener of the EET Committee, Murdo Fraser, in advance of the Stage 2 debate.

    We would like to acknowledge the support of R3 in London for making available to us the services of a political communications consultant in Edinburgh who has been of great assistance.

    Scottish Government amendments to the Bill have been lodged.

    Joint Insolvency Committee (JIC) Newsletter - Winter 2013

    The Joint Insolvency Committee (JIC) has issued its Winter 2013 Newsletter. The newsletter has a technical slant providing guidance for IPs on commissions and insolvency.

    Outlays and third party payments in trust deeds and sequestrations

    The Protected Trust Deed Regulations(Scotland) 2013 come into effect on 28 November 2013.  Following consultation earlier this year on SIP3A it was decided to delay the issue of a revised SIP3A until the PTD Regulations were issued.  In the interim the RPBs and the Insolvency Service have approved guidance on the treatment of outlays and third party payments in trust deeds and sequestrations.

    Consultation on SIP3.2 - CVAs

    Earlier this year the Joint Insolvency Committee announced that steps were being taken to produce separate SIPs for IVAs and CVAs.  During Spring 2013 Consultations were issued on SIP3A(Scotland) - Trust Deeds and on SIP3.1 - IVAs.  JIC is now consulting on a revised SIP3.2-CVAs which is to apply UK-wide.

    The SIP focuses on the statutory responsibilities of the insolvency practitioner when acting as nominee or supervisor, but also recognises that an insolvency practitioner may also propose a CVA.  Where the SIP applies only to CVAs proposed by directors the relevant paragraphs are identified as "directors' proposal".

    The revised SIP adopts the principles and key compliance standards of all new SIPs and all legislative references have been removed.

    Consultation responses are to be submitted by Tuesday 7 January 2014.

    Guidance note on PPI mis-selling claims - trust deeds and sequestrations 

    The Recognised Professional Bodies, R3 Association of Business Recovery Professionals and the Debt Resolution Forum have issued a guidance note on Payment Protection Insurance (PPI) mis-selling claims in trust deeds and sequestrations.  

    The guidance may be accessed at the link below.  

    Guidance note on PPI mis-selling claims in trust deeds and sequestrations  

    SIP16(Scotland) - Prepackaged Sales in Administrations

    The Joint Insolvency Committee (JIC) has agreed a revised SIP16. This is being issued today 1 October 2013 with an implementation date of  1 November 2013

    Click here to download SIP16(Scotland) – Prepacks – 1 November 2013 

    'Dear IP' - Issue no. 42 will be withdrawn by the Insolvency Service on 1 November 2013

    Protected Trust Deeds (Scotland) Regulations 2013

    New draft Protected Trust Deeds (Scotland) Regulations 2013 were laid before the Scottish Parliament on 2 September 2013.  These are expected to come into force on 28 November 2013. As the lead committee for the Scottish Government's Bankruptcy and Debt Advice (Scotland) Bill, the Economy, Energy and Tourism Committee will be considering the draft PTD Regulations at its meeting on Wednesday 25 September 2013.  ICAS has submitted written comment on the draft regulations for the EET Committee to consider. 

    ICAS has been invited to offer oral evidence on Wednesday 9 October 2013 to the EET Committee on the Bankruptcy and Debt Advice (Scotland) Bill.

    Draft Deregulation Bill

    ICAS has submitted a response to the UK Government's draft deregulation bill. The draft bill contains a broad range of measures intended to reduce the burden of regulation on business, civil society, other organisations and individuals. Included in the bill are measures relating to insolvency. 

    DBIS - Transparency & Trust: Enhancing the transparency of UK company ownership and increasing trust in UK business - discussion paper

    The UK Government issued a discussion paper with a range of proposals to ensure the transparency of who owns and controls UK companies. Various insolvency-related proposals around making the directors' disqualification regime more robust, improving financial redress mechanisms for creditors and introducing education for disqualified directors are included in Part B of the discussion paper. The ICAS response to the discussion paper can be accessed here  

    Bankruptcy and Debt Advice (Scotland) Bill

    ICAS has made a written submission to the call for evidence by the Economy, Energy and Tourism Committee on the Bankruptcy and Debt Advice (Scotland) Bill.  ICAS will provide oral evidence to the Committee on Wednesday 9 October 2013.

    Paymex - VAT Treatment of IP fees in trust deeds - update

    HMRC issued on 2 September 2013 Revenue and Customs Brief 25/13 to reiterate that the provisions contained in HMRC Brief 17/13 apply to trust deeds.

    Paymex – VAT Treatment of IP fees in trust deeds  

    HMRC has confirmed that “Revenue and Customs Brief 17/13” regarding the treatment of tax in voluntary arrangements following the decision in Paymex applies also to trust deeds. The brief was issued on 8 July 2013.

    Where the services of the IP constitute a single supply until the conclusion of the trust deed, this will be treated as exempt for VAT purposes.

    In instances where there has been a transfer of trust deed cases or portfolios of trust deeds have been sold and passed on, the fees of the succeeding trustee will be standard rated.


    Recent tax issues

    R3 and HMRC have been in discussion over tax-related issues regarding the operation of the Real Time Information (RTI) system in formal insolvency situations, and the VAT treatment of supervisors’ fees in the wake of the ‘Paymex’ decision.

    R3 has agreed with HMRC that it would share these notices with the Recognised Professional Bodies once the text had been decided.

    The notices which can be accessed on the ICAS website are also available on the R3 website. 

    The Real Time information can be accessed on the HMRC website.

    Guidance note on PPI mis-selling claims - IVAs

    The Recognised Professional Bodies, R3 and Debt Resolution Forum have issued a guidance note on dealing with PPI mis-selling claims in personal insolvency.  The guide focuses on IVAs and bankruptcy and can be accessed via the link below. 

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