{"id":405,"date":"2020-03-25T13:12:36","date_gmt":"2020-03-25T13:12:36","guid":{"rendered":"http:\/\/thecompliancealliance.co.uk\/blog\/?p=405"},"modified":"2020-03-25T13:12:36","modified_gmt":"2020-03-25T13:12:36","slug":"inss_and_rpb_help_during_covid19","status":"publish","type":"post","link":"https:\/\/thecompliancealliance.co.uk\/blog\/practical\/inss_and_rpb_help_during_covid19\/","title":{"rendered":"How can the Insolvency Service and RPBs help in this time?"},"content":{"rendered":"<p>When the work-place exodus started, I was heartened to read the ICAEW\u2019s acknowledgement that inevitably some statutory deadlines would be missed (although they hoped that remote-working would result in little disruption).\u00a0 In contrast, the IPA\u2019s two emails to members expressed the expectation that steps would be taken to ensure that statutory compliance continues.<\/p>\n<p>But to be fair, those notices were issued a couple of weeks\u2019 ago when our world looked quite different.\u00a0 More recently in Dear IP 92, Steve Allinson, Chairman of the Insolvency Service Board, expressed his intention for the Service to do its best to support IPs on their assignments, stressing the need for us all to come together at this time (while keeping our social distance, of course!).<\/p>\n<p>Steps that the InsS has already taken to facilitate the remote-operating of ISAs are very welcome and I hope that these mark just the beginning of changes needed to keep the insolvency wheels moving.<\/p>\n<p>The insolvency technical and compliance community has long practised coming together to resolve difficulties.\u00a0 Below is a summary of the suggestions of many who are struggling to help insolvency continue to work in these times.\u00a0 We hold out hope that the InsS and the RPBs will help.<\/p>\n<p>&nbsp;<\/p>\n<p><strong><u>Taking on New Appointments<\/u><\/strong><\/p>\n<ul>\n<li>MVL <strong>Declarations of Solvency<\/strong> need to be sworn in front of a solicitor\/commissioner for oaths. Solicitors are of the view that they must be in the <em>physical <\/em>presence of the one swearing (although the Law Society guidance is a little woollier).\u00a0 Could guidance be given to solicitors\/IPs on how this could be done virtually?\u00a0 Better still, could the Act\/Rules be temporarily relaxed to allow the author to verify these instead with a Statement of Truth.<\/li>\n<li><strong>ADM Notices of Intention to Appoint and Notices of Appointment<\/strong> present the same issue, so similar guidance\/relaxation would be invaluable.<\/li>\n<li><strong>Posting mailouts<\/strong> is generally problematic \u2013 some IPs use commercial mailing providers, but often IPs\/staff are simply using their own stash of stamps and making trips to the Post Office\/Box, which is not wise \u2013 and we cannot be certain that there will be anyone physically present at the recipients\u2019 offices to open the post in any event. The Act\/Rules already allow for some mailouts to be dealt with by advertisement notice (e.g. Para 49(6) of Schedule B1 IA86 and R3.38(1) IR16), but not in relation to circulars to creditors (except with court permission).\u00a0 Could there be a general power for an office holder to <strong>publish a notice<\/strong>, say in a Gazette (and such other way if they see fit), informing creditors who to contact\/how to access the mailout and that this advertisement would be taken as satisfying the delivery provisions?\u00a0 Of course, pre-CVL circulars are the responsibility of the director, so any such changes will also need to cover directors\u2019 notifying about the S100 decision process (including any subsequent physical meeting notice) and the Statement of Affairs.<\/li>\n<li>If the above is considered a step too far, then it would be useful to be able to write a one-pager to creditors inviting them to access the Statement of Affairs and other pre-S100 decision documents\/notices via a website, rather than have to send bulky letters to creditors.<\/li>\n<li>Of course, in addition to (or instead of) posting letters, IPs are now endeavouring to email statutory docs to creditors and others as much as possible. 45 states that deemed consent to <strong>email delivery<\/strong> occurs when a doc is emailed to the address to which the insolvent \u201chad customarily communicated with\u201d the recipient.\u00a0 Email delivery is much easier than post in this time, so guidance that what is <em>customary<\/em> need not be proven would be useful, e.g. to enable directors\/debtors simply to provide the IP with an email address for the recipient that the IP can take as valid.<\/li>\n<li><strong>HMRC<\/strong> requires notices of S100 decision processes to be sent to their email address, <a href=\"mailto:notifications.hmrccvl@hmrc.gov.uk\">notifihmrccvl@hmrc.gov.uk<\/a>, but it has not been made clear whether this email address also works for other S100 docs, e.g. the Statement of Affairs \u2013 clarification would be useful. An extension of this email address to allow also for post-appointment CVL circulars would also help.<\/li>\n<li>There is some concern that the court filings required in preparation of a CVA will be problematic in light of the courts\u2019 limited activities: the <strong>Nominee\u2019s report<\/strong> must be filed in court before the creditors and members can decide on the CVA Proposal.<\/li>\n<li>SIP3.2 para 10 requires an IP to <strong>meet directors \u201cface to face\u201d<\/strong>. Clarification that this does not have to be a physical meeting would be useful.<\/li>\n<li>Where a <strong>statutory physical meeting<\/strong> is required (e.g. where a creditor objects to a S100 decision proposed by deemed consent), it should be possible for everyone, including the convener, to attend the meeting virtually. Clarification of this would be valuable.<\/li>\n<li>Many IPs are reluctant to consider <strong>taking on new appointments<\/strong> that might require them, their staff or agents to attend on-site. However, the business may need to enter an insolvency process and business owners\/directors may be nervous to continue to be responsible for the businesses in this period waiting for the coast to clear for an IP to be appointed.\u00a0 Do they shut up shop now and make everyone redundant?\u00a0 Or do they furlough employees in the hope that the business might be sold once everyone emerges?\u00a0 If they choose the latter course, could they be at risk of an allegation of <strong>wrongful trading<\/strong>?\u00a0 Some clarification that business owners\/directors would not be penalised for helping employees to continue to be paid via furlough payments in this time would be helpful for IPs advising business owners\/directors.<\/li>\n<li>On the other hand, some guidance for IPs on how to handle <strong>trading-on appointments<\/strong> would also be valuable.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong><u>Statutory Filings \/ Deliveries<\/u><\/strong><\/p>\n<ul>\n<li>Of course, some relaxation to <strong>statutory deadlines<\/strong> would be invaluable.<\/li>\n<li>Some IPs are moving hell and high water to try to get <strong>progress reports<\/strong> issued, which can include asking one member of staff to attend premises to print docs, deal with mailouts etc. Personally, I would hope that the RPBs\/IS would prefer IPs and their staff to <em>stay at home<\/em> even if this means that progress report (and other?) deadlines are missed.\u00a0 In line with the Government\u2019s key messages, some clarification from the RPBs\/IS as to the importance (or not) of travelling to work simply to avoid certain breaches of statute\/SIPs in these times would seem urgently required.<\/li>\n<li>In particular, Para 107 only allows the 8-week timescale to deliver <strong>Administrators\u2019 Proposals<\/strong> (and the 10-week timescale for any decision on those Proposals) to be extended by court order. Confirmation that Administrators need not apply to court to extend these timescales would be very welcome.<\/li>\n<li>If shifting deadlines is considered a step too far and the RPBs\/IS wish for IPs to meet statutory deadlines wherever humanly possible, perhaps they could confirm that at least they, as regulators, will not look too unkindly on docs that are technically deficient as regards the disclosure requirements of statute &amp; SIPs.<\/li>\n<li>As above, it would be good to be able to notify creditors of statutory deliveries, e.g. Administrators\u2019 Proposals, by <strong>public advertisement<\/strong> to avoid the problems with posting out packs.<\/li>\n<li>At present, all filings to <strong>Companies House<\/strong> must be delivered by IPs in hard copy form. In addition to the logistical problems of posting letters mentioned above, IPs are also concerned at the potential for delays by Royal Mail etc. or Companies House such that time-critical dates are missed.\u00a0 In particular, Form AM22 (<strong>notice of move from Administration to CVL<\/strong>) must be <em>received <\/em>by Companies House before the Administration ends automatically.\u00a0 Therefore, a mechanism to enable all insolvency forms to be sent to Companies House by email would be valuable.<\/li>\n<li>Another issue is <strong>extending Administrations by court order<\/strong>. These are always time-pressured at the best of times, but with the courts\u2019 limited activity, there is real risk of Administrations ending automatically before a court order extending them can be granted.\u00a0 Ideally, a temporary halt of the automatic ending provision (Para 76) and of any subsequent end-date consented to by creditors or the court would be valuable.\u00a0 If this is a step too far, then perhaps Administrators could be allowed to seek a second extension by creditor consent, rather than having to resort to court.<\/li>\n<li>It is now usually impractical for staff\/IPs to review company records with a view to submitting CDDA <strong>D-reports<\/strong>. Of course they could submit an inconclusive D-report in the 3 month timescale and then, when they are able to review the records, they could submit \u201cnew information\u201d.\u00a0 However, this probably will be unhelpful to the DCRS staff, as in the future they may get a great number of \u201cnew information\u201d submissions, which cannot be processed automatically by their rules engine.\u00a0 Therefore, it is probably in everyone\u2019s interests to extend the 3-month deadline for D-reports.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong><u>Case Administration<\/u><\/strong><\/p>\n<ul>\n<li>An <strong>email address for HMRC forms<\/strong>, e.g. VAT769s, VAT100s, VAT7s, VAT426\/427s, would be valuable. Of course, this would involve a number of HMRC departments, but VAT769s and VAT426\/427s are particularly needed to be dealt with by email.<\/li>\n<li>In light of limited court activity, there is a risk that Trustees in Bankruptcy will not be able to make appropriate applications to avoid <strong>bankrupts\u2019 homes revesting<\/strong> under S283A IA86. A pause in the 3-year timescale would help.\u00a0 Failing this, could S283A(3) be flexed to allow a Trustee to have \u201capplied\u201d for a relevant order by simply posting a skeleton application to the court?<\/li>\n<li><strong>Consultations with employees<\/strong> of insolvent entities to comply with TULRCA (and TUPE) have previously been achieved usually by getting all employees together. This should now be avoided, but it does leave office holders with logistical difficulties in complying with TULRCA.\u00a0 Presumably Job Centre Plus attendance has also ended.\u00a0 Some guidance on how IPs should approach TULRCA and employee interaction generally would be valuable.<\/li>\n<li>It is not clear how <strong>furlough payments<\/strong> will work for employees of a business already in an insolvency process. For example, if the office holder retains staff on furlough payments in the hope that they might be able to sell the business (and TUPE transfer all staff) in the future, how will those furlough payments be treated?\u00a0 Confirmation that these will not be sought back either from the insolvent estate as an expense or from the purchaser would be welcome.<\/li>\n<li>Some IPs are office holders of <strong>nursing homes<\/strong> and they require regular, usually daily, on-site attendance by them or their staff. Some confirmation that they would be viewed as key-workers might assist.<\/li>\n<li>On some cases, office holders had already issued <strong>notices of intended dividend<\/strong> before the lock-down, but they will have problems issuing cheques for some time. 34(1) requires the office holder to declare the dividend within 2 months of the last date for proving.\u00a0 It is possible for the IP to <em>declare <\/em>the dividend, but not pay cheques out until later, but in the past this has been frowned upon by the RPBs.\u00a0 Some guidance that this is acceptable in these circumstances would be helpful.<\/li>\n<li>In other cases, an office holder would like to <em>extend<\/em> an already-notified last date for proving in recognition of creditors\u2019 difficulties in submitting proofs and therefore also extend the 2-month timescale for declaring the dividend (as well as the 14 days to adjudicate all claims \u2013 R14.32(1)), but there is no way to do this under the rules. The ability to do so would be useful, otherwise the whole process would need to be started again once we all emerge.<\/li>\n<li>Dear IP 92 urged IPs to show forbearance \u201cwhere possible\u201d to individuals who are finding it difficult to meet financial commitments. Although many IVA Proposals will provide capacity for <strong>payment breaks<\/strong>\/reductions, many will not.\u00a0\u00a0 In some cases, the debtors will already have used up their payment break quota.\u00a0 In other cases, the flexibility simply will not be there in the Proposals.\u00a0 Of course, variations can be sought but these are cumbersome especially in these times when mailouts are difficult.\u00a0 It is difficult to see what can be done about IVA terms, but we would welcome some guidance.<\/li>\n<li>The same will apply to CVAs based on regular contributions.<\/li>\n<li>On many IVAs (involving tax debts) and CVAs, <strong>HMRC has modified Proposals<\/strong> to restrict the Supervisor\u2019s ability to propose a variation, e.g. variations may not be allowed in the first year. HMRC has also modified many VAs by including more stringent clauses where the insolvent fails to pay contributions on time.\u00a0 Perhaps HMRC could notify IPs that, during this time, all such modifications may be considered waived.<\/li>\n<li>The AiB has issued a Dear Trustee letter (<a href=\"https:\/\/www.aib.gov.uk\/sites\/default\/files\/dear_trustee_-_covid-19_-_expanded_ptd_contingency_arrangements.pdf\">https:\/\/www.aib.gov.uk\/sites\/default\/files\/dear_trustee_-_covid-19_-_expanded_ptd_contingency_arrangements.pdf<\/a>) stating that he believes it would be reasonable for IPs not to extend the period of the Protected Trust Deed in order to ingather contributions that failed to be paid in this period. Personally, I do not believe that the same automatically applies in IVAs (as the Supervisor may be required to take specific action in line with the IVA terms), but the AiB\u2019s letter may create confusion for IVA debtors and IPs in this situation.\u00a0 Therefore, some guidance may be useful.<\/li>\n<li><strong>File reviews<\/strong> are pretty-much impossible for anyone who does not administer electronic case files. Confirmation from the RPBs that IPs are not expected to carry out regular formal file reviews during this period would help.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>When the work-place exodus started, I was heartened to read the ICAEW\u2019s acknowledgement that inevitably some statutory deadlines would be missed (although they hoped that remote-working would result in little disruption).\u00a0 In contrast, the IPA\u2019s two emails to members expressed &hellip; <a href=\"https:\/\/thecompliancealliance.co.uk\/blog\/practical\/inss_and_rpb_help_during_covid19\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[23],"tags":[155,154,46,88],"class_list":["post-405","post","type-post","status-publish","format-standard","hentry","category-practical","tag-coronavirus","tag-covid-19","tag-insolvency-service","tag-rpbs"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p6i4jv-6x","_links":{"self":[{"href":"https:\/\/thecompliancealliance.co.uk\/blog\/wp-json\/wp\/v2\/posts\/405","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thecompliancealliance.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thecompliancealliance.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thecompliancealliance.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thecompliancealliance.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=405"}],"version-history":[{"count":3,"href":"https:\/\/thecompliancealliance.co.uk\/blog\/wp-json\/wp\/v2\/posts\/405\/revisions"}],"predecessor-version":[{"id":408,"href":"https:\/\/thecompliancealliance.co.uk\/blog\/wp-json\/wp\/v2\/posts\/405\/revisions\/408"}],"wp:attachment":[{"href":"https:\/\/thecompliancealliance.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=405"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thecompliancealliance.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=405"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thecompliancealliance.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=405"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}