IRRV Alert - week ending 14th March 20014
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Insolvency Service Important Notification
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Notification of increase in the deposits and fees in insolvency
As someone who works with businesses and consumers who are facing insolvency, we are writing to notify you of an increase in the cost of insolvency proceedings in England and Wales. This will be effective from 6th April 2014.
We regret that it is necessary to increase fees but the increase in deposits and fees is required to ensure that the Insolvency Service meets its operational costs. It means that those who benefit from the insolvency process pay for that while protecting taxpayers’ money. We are making no change in the deposit for a bankruptcy debtor petition.
The official receiver’s administration fee has not increased for bankruptcy since 2007 and for companies wound up by the court since 2010. Deposits last increased in 2011.The fees are increasing (in line with cumulative inflation) as detailed in the tables below.
What fee increases mean for customers Customers are required to pay a deposit (whether they are a creditor or a debtor) when an insolvency petition is presented to the court. The deposit meets the initial costs incurred to administer the case. This is applicable to all bankruptcies and winding up cases. Case administration fees are partly offset by the deposit. Deposits for debtors petitioning for their own bankruptcy are remaining the same to ensure an accessible process. Protecting the public interest Where the Secretary of State petitions for winding up a company on the grounds of public interest is presented to the court the deposit increases to £5000. This is to more accurately reflect the higher level of official receiver’s costs associated with such cases. There is a corresponding increase in the administration fee in such cases to ensure that where a company is wound up on public interest grounds, the official receiver makes a full recovery in respect of the administration fee.
What fee increases mean for your organisation
We want you to have accurate and up to date information about insolvency fees to enable you to work with your customers.
We recover from customers the full cost of delivering winding up and bankruptcy services. Fees and charges are reviewed annually to ensure that full cost recovery can be achieved.
We are undertaking a review of insolvency fee structures and we will be inviting views as part of this process in due course. It is not envisaged that this will lead to a significant change in funding structures within the next year.
Contact the Insolvency Service to Learn More
Please contact the Insolvency Service if you have any questions about the change in insolvency fees. You can call our inquiry line on 0845 602 9848 or submit your question online.
You should note that the Insolvency Service is unable provide financial advice and guidance to help customers choose an option for debt resolution. Anyone needing this type of support should seek guidance from a money advice service or an insolvency practitioner.
The legislation
The Insolvency Proceedings (Fees) (Amendment) Order 2014 (the Order) comes into force on 6 April 2014. The Order makes amendments to the Insolvency Proceedings (Fees) Order 2004 S.I.2004/593 (the Principal Order). You can view the order here.
Graham Horne |
Graham Horne|Deputy Chief Executive & Director of OperationslThe Insolvency Service|+44(0)20 7637 6661| +44(0)7837 212608
graham.horne@insolvency.gsi.gov.uk| www.bis.gov.uk/insolvency