Directors of Dissolved Companies to be Investigated
The Insolvency Service has just reported that they will be given the power to investigate Directors of dissolved companies, closing the current legal loophole, aiming to act as a strong deterrent for misuse of the process. It is alleged that dissolution is being used to avoid repayment of the Government backed loans fraudulently obtained and the new bill has come about as a reaction to the dishonesty shown during the Coronavirus pandemic. This includes bounce back loans. At present, the Insolvency Service only has powers to investigate Directors of live companies or those entering a form of insolvency. Company Directors can expect to face up to 15 years disqualification if they misuse the support they have been given. These powers will be exercised by the Insolvency Service. The measure will also help to prevent Directors of dissolved companies from setting up a near identical business after the dissolution, which often leaves customers and other creditors, such as suppliers or HMRC, unpaid. Business Secretary Kwasi Kwarteng said: “As we build back better from the pandemic, we need to restore business confidence, but also people’s confidence in business – which is why we will not hesitate to disqualify directors who deliberately leave employees and the British taxpayer out of pocket. We are determined that the UK should be the best place in the world to do business. Extending powers to investigate directors of dissolved companies means those who have previously been able to avoid their responsibilities will be held to account.” This may see a reduction in dissolutions and more Company Directors seeking the advice of qualified Insolvency Practitioners.
The insolvency legislation was changed in October 2015, with one or two exceptions, for insolvency appointments made from that time. This sheet explains how we intend to apply the alternative fee bases allowed by the legislation when acting as office holder in insolvency appointments. The legislation allows different fee bases to be used for different tasks within the same appointment. The fee basis, or combination of bases, set for an appointment is / are subject to approval, generally by a committee if one is appointed by the creditors, failing which the creditors in general meeting, or the Court.
Further information about creditors’ rights can be obtained by visiting the creditors’ information micro-site published by the Association of Business Recovery Professionals (R3) at www.creditorinsolvencyguide.co.uk
Details about how an office holder’s fees may be approved for each case type are available in a series of guides issued with Statement of Insolvency Practice 9 (SIP 9) and can be accessed at:
Statement of Insolvency Practice 9 can be accessed at www.r3.org.uk/technical-library/england-wales/sips
A hard copy of the documents made available online may be requested free of charge from Abbey Taylor Limited, Unit 6 12 O’clock Court, Attercliffe Road, Sheffield, S4 7WW. Please note that we have provided further details in this policy document.
SIP 9 also contains various requirements that the office holder must comply with in connection with their remuneration, both when seeking approval and when reporting to creditors and other interested parties after approval. One of the matters that an office holder has to comply with is that they must also seek approval for any payments that could reasonably be perceived as representing a threat to the office holder’s objectivity or independence by virtue of a professional or personal relationship, including to an associate. Where it is anticipated that such payments will be made in a case they will be separately identified when seeking approval for the basis of the office holder’s remuneration.
Other than in respect of Voluntary Arrangements, an office holder is required to record the time spent on casework in all cases, even if they are being remunerated for that work on a basis other than time costs. Time is recorded directly to the relevant case using a computerised time recording system and the nature of the work undertaken is recorded at that time. The work is generally recorded under the following categories:
Case Administration (including statutory reporting) – includes work such as planning how the case will be administered and progressed; the administrative set up of the case; notifying creditors and others of the appointment; keeping the records relating to the case up to date; and reporting on progress of the case to creditors and others.
Realisation of Assets – includes work such as identifying, securing and insuring assets; dealing with retention of title claims; collecting debts owed; and selling assets.
Investigations – includes work such as undertaking an initial review of the financial affairs of the company or debtor; undertaking a detailed investigation with a view to making recoveries for the benefit of creditors where matters such as preferences or wrongful trading come to light as a result of the initial review; and reporting to the Insolvency Service on the conduct of the directors.
Creditors (claims and distributions) – includes work such as communicating with creditors; dealing with creditors’ claims; dealing with employees and liaising with the redundancy payments office; and where funds realised allow, paying dividends to creditors.
Trading – includes work such as managing and controlling all aspects of the business; and preparing financial records and information relating to that trading.
Case specific matters.
Time cost basis
When charging fees on a time costs basis we use charge out rates appropriate to the skills and experience of a member of staff and the work that they perform. This is combined with the amount of time that they work on each case, recorded in 6-minute units, with supporting narrative to explain the work undertaken.
Charge-out Rates
Grade of staff
Rates per hourfrom 08/07/19 (£)
Insolvency Practitioner
450 – 650
Manager
350 – 400
Other Senior Professionals
200 – 250
Assistants & Support Staff
150 – 200
These charge-out rates charged are reviewed on an annual basis and are adjusted to take account of inflation and the firm’s overheads.
When we seek time costs approval we have to set out a fees estimate. That estimate acts as a cap on our time costs so that we cannot draw fees of more than the estimated time costs without further approval from those who approved our fees. When seeking approval for our fees, we will disclose the work that we intend to undertake, the hourly rates we intend to charge for each part of the work, and the time that we think each part of the work will take. We will summarise that information in an average or “blended” rate for all the work being carried out within the estimate, and by reference to each separate category of work. The blended rate is calculated as the prospective average cost per hour, based upon the estimated time to be expended by each grade of staff at their specific charge out rate. We will also say whether we anticipate needing to seek approval to exceed the estimate and, if so, the reasons that we think that may be necessary.
The disclosure that we make should include sufficient information about the insolvency appointment to enable you to understand how the proposed fee reflects the complexity (or otherwise) of the case, any responsibility of an exceptional kind falling on the office holder, the effectiveness with which the office holder has carried out their functions, and the value and nature of the property with which the office holder has to deal.
If we subsequently need to seek authority to draw fees in excess of the estimate, we will say why we have exceeded, or are likely to exceed the estimate; any additional work undertaken, or proposed to be undertaken; the hourly rates proposed for each part of the work; and the time that the additional work is expected to take. As with the original estimate, we will summarise that information in an average or “blended” rate for all of the work being carried out within the estimate, and by reference to each separate category of work, and will also say whether we anticipate needing further approval and, if so, why we think it may be necessary to seek further approval.
Percentage Basis
The legislation allows fees to be charged on a percentage of the value of the property with which the office holder must deal (realisations and / or distributions). Different percentages can be used for different assets or types of assets. A report accompanying any fee request will set out the potential assets in the case, the remuneration percentage proposed for any realisations and the work covered by that remuneration, which may solely relate to work undertaken in connection with the realisation of the assets, but might also include other categories of work as listed earlier. The report will also include details of the expenses that will be, or are likely to be, incurred.
The percentage approved in respect of realisations will be charged against the assets realised, and where approval is obtained on a mixture of bases, any fixed fee and time costs will then be charged against the funds remaining in the liquidation after the realisation percentage has been deducted.
A percentage relating to distributions made to creditors may also be requested, in order to cover the work associated with the agreement of claims and making the distributions.
The disclosure that we make will include sufficient information about the insolvency appointment to enable understanding of how the proposed fee reflects the complexity (or otherwise) of the case, any responsibility of an exceptional kind falling on the office holder, the effectiveness with which the office holder has carried out their functions, and the value and nature of the property with which the office holder has to deal. In order to meet the requirements of SIP 9, it will also explain why the basis requested is expected to produce a fair and reasonable reflection of the work that we anticipate will be undertaken on the case.
If the basis of remuneration has been approved on a percentage basis then an increase in the amount of the percentage applied can only be approved by the committee or creditors (depending upon who approved the basis of remuneration) in cases where there has been a material and substantial change in the circumstances that were taken into account when fixing the original level of the percentage applied. If there has not been a material and substantial change in the circumstances, then an increase can only be approved by the Court.
Fixed Fee
The legislation allows fees to be charged at a fixed amount and different fixed amounts can be used for different tasks. A report accompanying any fee request will set out the fixed fee that we proposed to charge and the work covered by that remuneration, as well as the expenses that will be, or are likely to be, incurred.
The disclosure that we make will include sufficient information about the insolvency appointment to enable understanding of how the proposed fee reflects the complexity (or otherwise) of the case, any responsibility of an exceptional kind falling on the office holder, the effectiveness with which the office holder has carried out their functions, and the value and nature of the property with which the office holder has to deal. In order to meet the requirements of SIP 9 we will also explain why the basis requested is expected to produce a fair and reasonable reflection of the work that we anticipate will be undertaken on the case.
If the basis of remuneration has been approved on a fixed fee basis then an increase in the amount of the fixed fee can only be approved by the committee or creditors (depending upon who approved the basis of remuneration) in cases where there has been a material and substantial change in the circumstances that were taken into account when fixing the original level of the fixed fee. If there has not been a material and substantial change in the circumstances then, an increase can only be approved by the Court.
Direct Costs
Where we seek approval on a percentage and/or fixed fee basis, in order to meet the requirements of SIP 9 we also have to disclose the direct costs that are included within the remuneration that will be charged on those bases in respect of the work undertaken. The following are direct costs that will be included in respect of work undertaken in respect of each of the standard categories of work where the office holder is to be remunerated for such work on either a percentage or fixed fee basis:
Case Administration (including statutory reporting) – staff costs
Realisation of Assets – staff costs
Investigations – staff costs
Creditors (claims and distributions) – staff costs
Trading – staff costs
We do not envisage that we will include any other costs other than staff costs when requesting our fees on a fixed or percentage basis. All other costs required to be paid will be as an expense – however, if on an individual case this position changes this will be brought to the creditors attention.
Mixed Bases
If remuneration is to be sought on a mixed basis, we will make it clear in the report accompanying the request to fix the basis of remuneration which basis will be charged for each category of work that is to be undertaken on the case.
Members’ Voluntary Liquidations and Voluntary Arrangements
The legislation is different for members’ voluntary liquidations (MVL), Company Voluntary Arrangements (CVA) and Individual Voluntary Arrangements (IVA). In MVLs, the company’s members set the fee basis, often as a fixed fee, and SIP 9 does not apply unless the members specifically request it. In CVAs and IVAs, the fee basis is set out in the proposals and creditors approve the fee basis when they approve the arrangement.
All Fee Bases
Except for IVAs and CVAs, which are usually VAT exempt, the office holder’s remuneration invoiced to the insolvent estate will be subject to VAT at the prevailing rate.
Expenses
In accordance with Statement of Insolvency Practice 9 (SIP9), expenses are any payments from the estate which are neither an office holder’s remuneration nor a distribution to a creditor or a member. Expenses also includes disbursements. Disbursements are payments which are first met by the office holder, and then reimbursed to the office holder from the estate.
Expenses are divided into those that do not need approval before they are charged to the estate (category 1) and those that do (category 2):
Category 1 expenses: These are payments to persons providing the service to which the expense relates who are not an associate of the office holder.
Category 2 expenses: These are payments to associates or which have an element of shared costs.
Category 1 expenses are directly referable to an invoice from a third party, which is either in the name of the estate or Abbey Taylor Limited; in the case of the latter, the invoice makes reference to, and therefore can be directly attributed to, the estate. These expenses can be paid without prior approval either by a direct payment from the estate or, where the firm has made payment on behalf of the estate, by a recharge of the amount invoiced by the third party. Examples of category 1 expenses are statutory advertising, external meeting room hire, external storage, specific bond insurance and company search fees.
Category 2 expenses are either payments to associates or payments in respect of expenses that have an element of shared costs. These expenses require approval in the same manner as an office holder’s remuneration, whether paid directly from the estate or as a disbursement. The practise may seek to recover the following category 2 expenses that include an element of shared costs:
Mileage
45p per mile
Photocopying
5p per sheet
Professional Advisors may be instructed to assist the office holder where they consider that such assistance is required to enable them to administer the case. The fees charged by any professional advisors will be recharged at cost. Where the professional advisor is not an associate of the office holder, it will be for the office holder to agree the basis of their fees. Where the professional advisor is an associate of the office holder, it will be for those responsible for fixing the basis of the office holder’s remuneration to approve payments to them. The fees of any professional advisors are subject to the rights of creditors to seek further information about them or challenge them. Professional advisors that may be instructed on a case include:
Solicitors / Legal Advisors
Auctioneers / Valuers
Accountants
Quantity Surveyors
Estate Agents
Other Specialist Advisors
Reporting and Rights to Challenge
Once the basis of the office holder’s remuneration has been approved, a periodic report will be provided to any committee and to each creditor. The report will provide a breakdown of the remuneration charged by the office holder in the period covered by the report, i.e., the amount that the office holder is entitled to draw, together with the amount of remuneration actually drawn. If approval has been obtained for remuneration on a time costs basis, the time costs incurred will also be disclosed, whether drawn or not, together with the “blended” rates of such costs. The report will also compare the actual time costs incurred with those included in the fees estimate prepared when fixing the basis of the remuneration, and indicate whether the fees estimate is likely to be exceeded. If the fees estimate has been exceeded, or is likely to be exceeded, the report will explain why that is the case.
The report will also provide information about expenses incurred in the period covered by the report, together with those actually paid, together with a comparison with the estimated expenses. If the expenses incurred, or anticipated to be incurred, have exceeded the estimate provided the report will explain why that is the case.
Under the insolvency legislation the report must also include a statement of the legislative rights of creditors to request further information about the remuneration charged and expenses incurred in the period covered by the report, or to challenge them on the grounds that they are excessive. Extracts of the relevant insolvency rules dealing with these rights are set out below. Once the time period to seek further information about the office holder’s remuneration and/or expenses for the period covered by the report has elapsed, then a Court Order is required to compel the office holder to provide further information about the remuneration and expenses. A Court order is required to challenge the office holder’s remuneration and/or expenses for the period covered by the report. Once that period has elapsed, then a separate Court Order is required to allow an application out of time.
Under rule 18.9 of the Insolvency (England and Wales) Rules 2006, an unsecured creditor may, with the permission of the Court or with the concurrence of 5% in value of the unsecured creditors (including the creditor in question) request further details of the office holder’s remuneration and expenses, within 21 days of receipt of any report for the period. Any secured creditor may request the same details in the same time limit.
Under rule 18.34, an unsecured creditor may, with the permission of the Court or with the concurrence of 10% in value of the unsecured creditors (including the creditor in question), apply to court to challenge the amount and/or basis of the office holder’s fees and the amount of any proposed expenses or expenses already incurred, within 8 weeks of receipt of any report for the period. Any secured creditor may make a similar application to court within the same time limit.
The following is designed to draw the attention of interested parties to the information required to be disclosed by the Provision of Services Regulations 2009.
Tracy Ann Taylor is licensed in the United Kingdom to act as an Insolvency Practitioner by The Institute of Chartered Accountants in England and Wales (ICAEW). Copies of the relevant insolvency license certificates and bond schedules as proof of the security required under Section 390(3) of the Insolvency Act 1986 are available for inspection at our offices. Tracy Ann Taylor is also a member of the Insolvency Practitioners Association.
Rules Governing Actions
All Insolvency Practitioners are bound by the rules of their professional body, including any that relate specifically to insolvency. The rules of the professional body that licences Abbey Taylor Limited can be found at: www.icaew.com/regulation/insolvency/sips-regulations-and-guidance/insolvency-licensing-regulations-and-guidance-notes In addition, IPs are bound by the Statements of Insolvency Practice (SIPs), details of which can be found at www.r3.org.uk/technical-library/england-wales/sips
Ethics
All Insolvency Practitioners are required to comply with the Insolvency Code of Ethics and a copy of the Code can be found at:www.icaew.com/regulation/insolvency/sips-regulations-and-guidance/insolvency-code-of-ethics
Bribery
Our Practice is committed to carrying on its business fairly, openly and honestly. Our business culture is one where bribery is never acceptable. We are dedicated to upholding the principles and provisions of The Bribery Act 2010. The Act details offences include bribes paid anywhere in the world by UK citizens or residents, including bribes paid by legal persons as a well as individuals. Some of the Act’s provisions are relevant to UK businesses (companies and partnerships) operating overseas, and also to foreign businesses operating in the UK.
Governing Law and Jurisdiction
Abbey Taylor Limited undertakes its activities as an Insolvency Practitioner in accordance with the laws of England and Wales. Any disputes will be governed by and construed in accordance with the laws of England and Wales.
Professional Indemnity Insurance
Travelers Insurance Company LimitedOne Creechurch PlaceCreechurch LaneLondonEC3A 5AF Tel: +44 (0) 020 3207 6000 This professional indemnity insurance provides worldwide coverage, excluding professional business undertaken within the United States of America, Canada and any country, territory or jurisdiction in which American or Canadian law (Federal, State or Provincial) is applicable or in which a judgment based upon such law may be enforceable in connection with such work.
Complaints
Abbey Taylor Limited always strives to provide a professional and efficient service. However, we recognise that it is in the nature of insolvency proceedings for disputes to arise from time to time. As such, should you have any comments or complaints regarding the administration of a particular case, then in the first instance you should contact the Insolvency Practitioner acting as office holder. If you consider that the Insolvency Practitioner has not dealt with your comments or complaint appropriately, you should then put details of your concerns in writing to the Complaints Officer at Abbey Taylor Ltd, Unit 6 12 O’clock Court, Attercliffe Road, Sheffield, S4 7WW. This will formally invoke our complaints procedure and we will endeavour to deal with your complaint under the supervision of a senior partner unconnected with the appointment. It is our belief that most disputes can be resolved amicably either through the provision of further information or following negotiations. However, in the event that you have exhausted our complaints procedure and you are not satisfied that your complaint has been resolved or dealt with appropriately, you may complain to the regulatory body that licences the Insolvency Practitioner concerned. Any such complaints should be addressed in writing to:-
The Insolvency Service, IP Complaints, 3rd Floor, 1 City Walk, Leeds, LS11 9DA· Using an on-line form available at www.gov.uk/complain-about-insolvency-practitioner· By emailing insolvency.enquiryline@insolvency.gov.uk· By calling the Insolvency Service Enquiry Line on 0300 678 0015 (details of call charges can be found at www.gov.uk/call-charges)
As the economic effects of the Covid pandemic are beginning to hit UK Business, Abbey Taylor have put together this survival check list.
Our MD Tracy Taylor MIPA FABRP has made it quite clear to the Senior Management Team that, “Cash is King” and liquidity in any business will be one of the major factors in deciding if any business is solvent and can trade forward.
Firms must try to balance their working capital and match creditor payments with debtor bills.
Managing your creditor book, you must get your internal credit control up to maximum to increase debtor payments in.
Business owners and FD’s need to keep a clear position between the finance required for the business, look at factoring, invoice discounting and extending an overdraft facility and funding its losses utilising cash reserves and or a loan.
This strategy can be bench marked against the “new” cash flow forecast you have built for the quarter. This will need maintaining and monitoring and will be the basis for the new 12 month cash flow forecast post the cost saving exercise outlined.
Q: Have you claimed; schemes, grants and loans available?
If you haven’t then speak to your Accountant or Abbey Taylor before it’s too late!
If you haven’t, ask Abbey Taylor for our simple checklist. It gives a with hints and tips on what to review and how to reduce cost without damaging your business.
ACTUAL EXPENSES
Month 1
Month 2
Month 3
Employee Costs
Jan
Feb
Mar
Wages
£85,000.00
£85,000.00
£85,000.00
Benefits
£22,950.00
£22,950.00
£22,950.00
Subtotal
£107,950.00
£107,950.00
£107,950.00
Office Costs
Jan
Feb
Mar
Office lease
£9,800.00
£9,800.00
£9,800.00
Gas
£4.00
£430.00
£385.00
Electricity
£288.00
£278.00
£268.00
Water
£35.00
£33.00
£34.00
Telephone
£224.00
£235.00
£265.00
Internet access
£180.00
£180.00
£180.00
Office supplies
£256.00
£142.00
£160.00
Security
£600.00
£600.00
£600.00
Subtotal
£11,387.00
£11,698.00
£11,692.00
Marketing Costs
Jan
Feb
Mar
Website hosting
£500.00
£500.00
£500.00
Website updates
£200.00
£200.00
£200.00
Collateral preparation
£4,800.00
£0.00
£0.00
Collateral printing
£100.00
£500.00
£100.00
Marketing events
£1,800.00
£2,200.00
£2,200.00
Miscellaneous expenses
£145.00
£156.00
£123.00
Subtotal
£7,545.00
£3,556.00
£3,123.00
Training/Travel
Jan
Feb
Mar
Training classes
£1,600.00
£2,400.00
£1,400.00
Training-related travel costs
£1,200.00
£2,200.00
£1,400.00
Subtotal
£2,800.00
£4,600.00
£2,800.00
TOTAL Planned Expenses
Jan
Feb
Mar
Monthly Actual Expenses
£129,682.00
£127,804.00
£125,565.00
TOTAL Actual Expenses
£129,682.00
£257,486.00
£383,051.00
Build a new cash flow forecast, with your new cost savings and realistic sales forecast.
If you would like support with this we have specialised software and Abbey Taylor’s in house super user can help your business project your business outlook.
Has your business growth been adversely affected by Coronavirus Pandemic?
Depending on your type of business there are various proven options available to grow your business sales and maximise your current customer base.
Hold off on any “new” initiatives and projects for at least 3 months. Bring in a ban on overtime. Tighten up your expenses policy (no flights, first class travel and bring in a maximum budget for overnight stays).
All Blue-Chip Firms follow this strategy from time to time. Often linked to a “profit warnings” or a major restructure within the bigger organisations. But it works, it buys you time to make the cost saving changes outlined below and gives you a baseline of costs.
You must communicate this effectively but with a positive tone, to all colleagues face to face, explaining what you are trying to achieve and why. You will receive some difficult questions but answer them honestly and reiterate the importance of a stable financial position for the Company during these difficult times.
Utilities – Gas Electricity Water
If you’re not sure when you last switched, then switch now U Switch or Love Energy Savings. If you are tied into a fixed deal check the contract. You can often switch with the same provider in the last 12 months of a long fixed contract.
Mobiles, Telecomms and Internet – Broadband, Cloud and Calls.
Review your current packages, check your contracts and switch. You might be offered far better rates just by calling up to “cancel” with your incumbent providers. We recommend The Business Mobile for huge savings and we use ETI Cloud for managed services Telco/Wifi.
Rent
Look at your lease agreement, is it up to date? If your Company is on a “rolling” contract ask the Landlord about a rent review. Check if you’re paying buildings Insurance to the landlord (common with multiple occupancy offices or business units) if so make sure your not paying twice.
Insurance – Buildings & Content, Company Car, Professional Indemnity, Group Life Schemes.
Do Not Auto Renew! Time for action…. Get all your insurance policies out and check them one by one. Build a simple list of renewal dates and put them in your Calendar 2 weeks before renewal date Cancel duplicates immediately, speak to your broker. And shop around!
Office Supplies – Printing, Stationary, Postage.
Boy can you “save some pennies” here. Review your contracts if applicable. We had an old tired printer that had the engineer out to fix it that often we gave the guy his own mug. But seriously we went to market and got a fantastic new digital printer and re-negotiated our terms. The new firm even paid up our old tied-in contract.
We’ve now reduced our annual printing postage and stationary spend by £20,000. By sending the majority documents electronically through our NEW website portal.
These are tough times, on the back of cost saving program you communicated. Move the discussion to colleagues and ask them to come up with cost saving ideas. If you don’t already have one in place set up a brew fund, where everyone contributes towards the costs.
As part of your cost saving program you must review your sales and marketing outputs.
The most cost-effective way to achieve this is by outsourcing some or all of your marketing activity.
We have seen some fantastic examples of businesses diversifying their old business model very quickly to adapt to the last 90 days pandemic.
Our strategic partner Abbott Browne work very closely with us to drive new channels to market and initiatives.
Summary.
Cash is King, so have you exhausted all the loans and grants available to your business?
Freeze Spending, review all contracts and insurance you have within you business.
Make Cost Savings, switch and save.
Cashflow Forecast, build a new 13 week forecast and monitor it.
Get your Marketing right, make sure your online and offline marketing spend is giving you the best return on investment it can.
Outsource, if you are looking to restructure some roles and functions, considering an external partner with industry expertise is key to your continued success.
Yesterday the government published its 60-page Covid-19 Recovery Strategy and how the UK will move from present lockdown to phased return to work. There were no new financial business initiatives announced but it was stated that the present support system will be extended until September but with the caveat that business owners might have to make financial contributions to keep the furlough scheme going.
One part of the document that we believe is the most pertinent for our clients and partners is on page 55 covering workplace safety and how business must adopt measures to get co-workers back into the workplace safely. That guidance is linked to further HM Gov high-level guidance also published yesterday to help employers, employees and the self-employed understand how to work safely during the coronavirus pandemic.
All business owners need to assess and manage the risks of COVID-19 and if you have 5 workers or more you must have a written assessment. Your risk assessment should identify practical actions that protect people from harm and injury. There is a useful toolkit published by the Health and Safety Executive at: https://www.hse.gov.uk/risk/assessment.htm
Abbey Taylor Business Rescue and Recovery is here to help our Partners and Clients during the COVID-19 pandemic – including making it easier to navigate the full breadth of support that’s available. This document highlights the many different support measures aimed at UK businesses and employees, explaining who is eligible, when the schemes open and how to apply. The Government have put together a comprehensive guide of these measures and can be found here.
Government Backed Schemes:
Coronavirus Business Interruption Loan Scheme Click here
This document was last updated on 5th May 2020. The information on this document is not intended to be comprehensive, and many details which may change. Correct at time of printing. @AbbeyTaylorLtd.
The coronavirus outbreak has created unprecedented uncertainty for everyone around the world.
Our number one priority is the safety and well being of our clients, colleagues and communities.
That’s why I want to share with you our response to the coronavirus and reassure you that we have robust plans that we’re reviewing these on a daily basis, as the situation develops.
We’re following Government advice, with many of our colleagues already successfully working remotely, using digital documentation and making use of technology to ensure that we’re continuing to support you.
We understand how important that it is to keep in touch, however we’re trying to keep face-to-face contact to a minimum so please speak to your usual contact about making suitable alternative arrangements. We have a variety of options available.
We also know that people may be worried about the impact coronavirus could have in the coming months. Our experts are providing ongoing updates to help you or your business prepare for the future all based on the guidelines set out by our regulating bodies; The Institute of Chartered Accountants England and Wales and The Financial Conduct Authority.
We will be updating our website regularly and using our social media channels to share with you insights and useful information, so please do visit it when you need to.
Please stay safe and don’t hesitate to contact us if you have any questions about our response to coronavirus or how we can work together to get through this difficult time.
PRACTICE FEE RECOVERY POLICY FOR ABBEY TAYLOR LIMITED
Introduction
The insolvency legislation was changed in October 2015, with one or two exceptions, for insolvency appointments made from that time. This sheet explains how we intend to apply the alternative fee bases allowed by the legislation when acting as office holder in insolvency appointments. The legislation allows different fee bases to be used for different tasks within the same appointment. The fee basis, or combination of bases, set for a particular appointment is / are subject to approval, generally by a committee if one is appointed by the creditors, failing which the creditors in general meeting, or the Court.
Further information about creditors’ rights can be obtained by visiting the creditors’ information micro-site published by the Association of Business Recovery Professionals (R3) at www.creditorinsolvencyguide.co.uk. Details about how an office holder’s fees may be approved for each case type are available in a series of guides issued with Statement of Insolvency Practice 9 (SIP9) and can be accessed at www.icaew.com/en/technical/insolvency/creditors-guides. Alternatively a hard copy may be requested from Abbey Taylor Limited, Unit 6 Twelve O’Clock Court, Attercliffe Road, Sheffield, S4 7WW free of charge. Please note that we have provided further details in this policy document.
Once the basis of the office holder’s remuneration has been approved, a periodic report will be provided to any committee and also to each creditor. The report will provide a breakdown of the remuneration drawn. If approval has been obtained for remuneration on a time costs basis, i.e. by reference to time properly spent by members of staff of the practice at our standard charge out rates, the time incurred will also be disclosed, whether drawn or not, together with the average, or “blended” rates of such costs. Under the legislation, any such report must disclose how creditors can seek further information and challenge the basis on which the fees are calculated and the level of fees drawn in the period of the report. Once the time to challenge the office holder’s remuneration for the period reported on has elapsed, then that remuneration cannot subsequently be challenged.
Under some old legislation, which still applies for insolvency appointments commenced before 6 April 2010, there is no equivalent mechanism for fees to be challenged.
Time cost basis
When charging fees on a time costs basis we use charge out rates appropriate to the skills and experience of a member of staff and the work that they perform. This is combined with the amount of time that they work on each case, recorded in 6 minute units, with supporting narrative to explain the work undertaken.
Charge-out Rates
Grade of staff Charge-out rates per hour
Partner, appointment taker – £450 to £600
Manager – £350 to £400
Case Administrator – £200 to £250
Cashier / Support Staff – £150 to £200
These charge-out rates charged are reviewed on an annual basis and are adjusted to take account of inflation and the firm’s overheads.
Time spent on casework is recorded directly to the relevant case using a computerised time recording system and the nature of the work undertaken is recorded at that time. The work is generally recorded under the following categories:
· Administration and Planning – which includes work such as planning how the case will be administered and progressed; the administrative set up of the case; notifying creditors and others of the appointment; keeping the records relating to the case up to date; and reporting on progress of the case to creditors and others.
· Investigations – which includes work such as undertaking an initial review of the financial affairs of the company and bankrupt; undertaking a detailed investigation with a view to making recoveries for the benefit of creditors where matters such as preferences or wrongful trading come to light as a result of the initial review; and reporting to the Insolvency Service on the conduct of the directors.
· Realisation of Assets – which includes work such as identifying, securing and insuring assets; dealing with retention of title claims; collecting debts owed; and selling assets.
· Creditors – which includes work such as communicating with creditors; dealing with creditors’ claims; dealing with employees and liaising with the redundancy payments office; and where funds realised allow, paying dividends to creditors.
· Trading – which includes work such as managing and controlling all aspects of the business; and preparing financial records and information relating to that trading.
When we seek time costs approval we have to set out a fees estimate. That estimate acts as a cap on our time costs so that we cannot draw fees of more than the estimated time costs without further approval from those who approved our fees. When seeking approval for our fees, we will disclose the work that we intend to undertake, the hourly rates we intend to charge for each part of the work, and the time that we think each part of the work will take. We will summarise that information in an average or “blended” rate for all of the work being carried out within the estimate. We will also say whether we anticipate needing to seek approval to exceed the estimate and, if so, the reasons that we think that may be necessary.
The disclosure that we make should include sufficient information about the insolvency appointment to enable you to understand how the proposed fee reflects the complexity (or otherwise) of the case, any responsibility of an exceptional kind falling on the office holder, the effectiveness with which the office holder has carried out their functions, and the value and nature of the property with which the office holder has to deal.
If we subsequently need to seek authority to draw fees in excess of the estimate, we will say why we have exceeded, or are likely to exceed the estimate; any additional work undertaken, or proposed to be undertaken; the hourly rates proposed for each part of the work; and the time that the additional work is expected to take. As with the original estimate, we will say whether we anticipate needing further approval and, if so, why we think it may be necessary to seek further approval.
Percentage Basis
The legislation allows fees to be charged on a percentage of the value of the property with which the office holder has to deal (realisations and / or distributions). Different percentages can be used for different assets or types of assets. A report accompanying any fee request will set out the potential assets in the case, the remuneration percentage proposed for any realisations and the work covered by that remuneration, as well as the expenses that will be, or are likely to be, incurred. Expenses can be incurred without approval, but must be disclosed to help put the remuneration request into context.
The percentage approved in respect of realisations will be charged against the assets realised, and where approval is obtained on a mixture of bases, any fixed fee and time costs will then be charged against the funds remaining in the liquidation after the realisation percentage has been deducted.
The disclosure that we make should include sufficient information about the insolvency appointment to enable you to understand how the proposed fee reflects the complexity (or otherwise) of the case, any responsibility of an exceptional kind falling on the office holder, the effectiveness with which the office holder has carried out their functions, and the value and nature of the property with which the office holder has to deal.
If the basis of remuneration has been approved on a percentage basis then an increase in the amount of the percentage applied can only be approved by the committee or creditors (depending upon who approved the basis of remuneration) in cases where there has been a material and substantial change in the circumstances that were taken into account when fixing the original level of the percentage applied. If there has not been a material and substantial change in the circumstances, then an increase can only be approved by the Court.
Fixed Fee
The legislation allows fees to be charged at a set amount and different set amounts can be used for different tasks. A report accompanying any fee request will set out the set fee that we proposed to charge and the work covered by that remuneration, as well as the expenses that will be, or are likely to be, incurred. Expenses can be incurred without approval, but must be disclosed to help put the remuneration request into context.
The disclosure that we make should include sufficient information about the insolvency appointment to enable you to understand how the proposed fee reflects the complexity (or otherwise) of the case, any responsibility of an exceptional kind falling on the office holder, the effectiveness with which the office holder has carried out their functions, and the value and nature of the property with which the office holder has to deal.
If the basis of remuneration has been approved on a fixed fee basis then an increase in the amount of the fixed fee can only be approved by the committee or creditors (depending upon who approved the basis of remuneration) in cases where there has been a material and substantial change in the circumstances that were taken into account when fixing the original level of the fixed fee. If there has not been a material and substantial change in the circumstances then, an increase can only be approved by the Court.
Members’ Voluntary Liquidations and Voluntary Arrangements
The legislation changes that took effect from 1 October 2015 did not apply to Members’ Voluntary Liquidations (MVLs), Company Voluntary Arrangements (CVAs) or Individual Voluntary Arrangements (IVAs). In MVLs, the company’s members set the fee basis, often as a fixed fee. In CVAs and IVAs, the fee basis is set out in the proposals and creditors approve the fee basis when they approve the arrangement.
All Bases
Where applicable, the officeholder’s remuneration invoiced to the insolvent estate will be subject to VAT at the prevailing rate.
Agent’s Costs
Charged at cost based upon the charge made by the Agent instructed, the term Agent includes:
· Solicitors / Legal Advisors
· Auctioneers / Valuers
· Accountants
· Quantity Surveyors
· Estate Agents
· Other Specialist Advisors
In new appointments made after 1 October 2015, the office holder will provide details of expenses to be incurred, or likely to be incurred, when seeking fee approval. When reporting to the committee and creditors during the course of the insolvency appointment, the actual expenses incurred will be compared with the original estimate provided.
Disbursements
In accordance with Statement of Insolvency Practice 9 (SIP9) the basis of disbursement allocation in respect of disbursements incurred by the Office Holder in connection with the administration of the estate must be fully disclosed to creditors. Disbursements are categorised as either Category 1 or Category 2.
Category 1 expenses are directly referable to an invoice from a third party, which is either in the name of the estate or Abbey Taylor Limited; in the case of the latter, the invoice makes reference to, and therefore can be directly attributed to, the estate. These disbursements are recoverable in full from the estate without the prior approval of creditors either by a direct payment from the estate or, where the firm has made payment on behalf of the estate, by a recharge of the amount invoiced by the third party. Examples of category 1 disbursements are statutory advertising, external meeting room hire, external storage, specific bond insurance and company search fees.
Category 2 expenses are incurred by the firm and recharged to the estate; they are not attributed to the estate by a third party invoice and/or they may include a profit element. These disbursements are recoverable in full from the estate, subject to the basis of the disbursement charge being approved by creditors in advance. Examples of category 2 disbursements are photocopying, internal room hire, internal storage and mileage.
It is proposed that the following Category 2 disbursements are recovered:
Provision of Services Regulations Summary Sheet for Abbey Taylor Limited
The following is designed to draw the attention of interested parties to the information required to be disclosed by the Provision of Services Regulations 2009.
Company Name: Abbey Taylor Limited
Company Type: Private Limited Company
Company Number: 04992674
Registered Office: Unit 6 Twelve O’clock Court 21 Attercliffe Road Sheffield England S4 7WW
Telephone Number: 0114 331 0000
Fax Number: 0114 331 0260
Email: info@abbeytaylor.co.uk
VAT Number: 836 3500 38
Insolvency Practitioners
Tracy Ann Taylor is licensed in the United Kingdom to act as an Insolvency Practitioner by The Institute of Chartered Accountants in England and Wales (ICAEW). Copies of the relevant insolvency licence certificates and bond schedules as proof of the security required under Section 390(3) of the Insolvency Act 1986 are available for inspection at our offices.
Tracy Ann Taylor is also a members of the Insolvency Practitioners Association.
Rules Governing Actions
All Insolvency Practitioners are bound by the rules of their professional body, including any that relate
specifically to insolvency. The rules of the professional body that licences Abbey Taylor Limited can be found
In addition, IPs are bound by the Statements of Insolvency Practice (SIPs), details of which can be found
at www.r3.org.uk/what-we-do/publications/professional/statements-of-insolvency-practice.
Ethics
All Insolvency Practitioners are required to comply with the Insolvency Code of Ethics and a copy of the
Code can be found at www.icaew.com/en/technical/insolvency/insolvency-regulations-and-standard.
Bribery
Our Practice is committed to carrying on its business fairly, openly and honestly. Our business culture is one
where bribery is never acceptable.
We are dedicated to upholding the principles and provisions of The Bribery Act 2010. The Act details offences
include bribes paid anywhere in the world by UK citizens or residents, including bribes paid by legal persons
as a well as individuals. Some of the Act’s provisions are relevant to UK businesses (companies and
partnerships) operating overseas, and also to foreign businesses operating in the UK.
Governing Law and Jurisdiction Abbey Taylor Limited undertakes its activities as an Insolvency Practitioner in accordance with the laws of England and Wales. Any disputes will be governed by and construed in accordance with the laws of England and Wales.
Professional Indemnity Insurance
Travelers Insurance Company Limited
Exchequer Court
33 St Mary Axe
London
EC3A 8AG
Tel: +44 (0) 020 3207 6000
This professional indemnity insurance provides worldwide coverage, excluding professional business
undertaken within the United States of America, Canada and any country, territory or jurisdiction in which
American or Canadian law (Federal, State or Provincial) is applicable or in which a judgment based upon
such law may be enforceable in connection with such work.
Complaints
Abbey Taylor Limited always strives to provide a professional and efficient service. However, we recognise
that it is in the nature of insolvency proceedings for disputes to arise from time to time. As such, should
you have any comments or complaints regarding the administration of a particular case, then in the first
instance you should contact the Insolvency Practitioner acting as office holder.
If you consider that the Insolvency Practitioner has not dealt with your comments or complaint
appropriately, you should then put details of your concerns in writing to the Complaints Officer at Abbey
Taylor Ltd, Unit 6 Twelve O’clock Court, Attercliffe Road, Sheffield, S4 7WW. This will formally invoke our
complaints procedure and we will endeavour to deal with your complaint under the supervision of a senior
partner unconnected with the appointment.
It is our belief that most disputes can be resolved amicably either through the provision of further
information or following negotiations. However, in the event that you have exhausted our complaints
procedure and you are not satisfied that your complaint has been resolved or dealt with appropriately, you may
complain to the regulatory body that licences the Insolvency Practitioner concerned. Any such complaints
should be addressed:
· In writing to The Insolvency Service, IP Complaints, 3rd Floor, 1 City Walk, Leeds, LS11 9DA
· Using an on-line form available at www.gov.uk/complain-about-insolvency-practitioner
· By emailing insolvency.enquiryline@insolvency.gov.uk
· By calling the Insolvency Service Enquiry Line on 0300 678 0015 (details of call charges can be
found at www.gov.uk/call-charges)
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