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May 2009
Chapter 36 Estate accounting
Introduction and index
Under the provisions of the Enterprise Act 2002 (EA2002) The Insolvency Service introduced a new, modernised financial regime. A simplified fee structure was introduced, bringing increased transparency. The principle of the financial regime is that creditors will pay for the full costs of the official receiver's administration via a single administration fee funded in part from the petition deposit and a general Secretary of State's administration fee chargeable only in compulsory insolvencies. This involves some cross subsidy between case administrations but eliminates cross function subsidy as the costs of investigations and enforcement activities are paid for centrally.
36.2 Legislation governing the official receiver’s fees and expenses
The fees and expenses charged from 1 April 2004, in both company winding up and bankruptcy proceedings (partnerships are dealt with at Part 5) in respect of the performance by the official receiver of his/her functions and duties under IA86 or the performance of functions of the Secretary of State are laid down in:
(a) the Insolvency Proceedings (Fees) Order 2004 (SI 2004/593)(referred to hereinafter as “FO2004”);
(b) the Insolvency Proceedings (Fees) (Amendment) Order 2005 (SI 2005/544);
(c) the Insolvency Proceedings (Fees) (Amendment) Order 2006 (SI 2006/561);
(d) the Insolvency Proceedings (Fees) (Amendment) Order 2007 (SI 2005/521);
(e) the Insolvency Proceedings (Fees) (Amendment) Order 2008 (SI 2008/714);
(f) the Insolvency Proceedings (Fees) (Amendment) Order 2009 (SI 2009/645);
(g) the Insolvency Regulations 1994 (SI 1994/2507);
(h) the Insolvency (Amendment) Regulations 2004 (SI 2004/472);
(i) the Insolvency (Amendment) Regulations 2005 (SI 2005/512);
(j) the Insolvency (Amendment) Regulations 2008 (SI 2008/670);
(k) the Insolvency (Amendment) Regulations 2009 (SI 2009/482);
(l) the Insolvency Proceedings (Monetary Limits) (Amendment) Order 2009 (SI2009/465);
(m) the Insolvency Practitioners and Insolvency Services Account (Fees) (Amendment) Order 2009 (SI 2009/487).
36.3
Revocation of previous fee orders (amended May 2010)The Insolvency Proceedings (Fees) Order 2004 (FO2004) came into force on 1 April 2004. The majority of the other secondary legislation to implement the reforms to the financial regime of The Insolvency Service also came into force on 1 April 2004 (see Annex A). The FO2004 partly revoked the Companies (Department of Trade and Industry) Fees Order 1985 (as amended) , the Insolvency Fees Order 1986 (as amended), and the Bankruptcy Fees Order 1984 (as amended). The saved fees (the Secretary of State fees see Annex B) continued to be applicable to cases that were commenced under the Bankruptcy Act 1914 or the Companies Act 1985, before 29 December 1986. In the case of the Insolvency Fees Order 1986, the saved fees (which were the Secretary of State fees) continued to be applicable to cases that were commenced under the Insolvency Act 1986 after 29 December 1986 but in respect of which, a winding-up order or bankruptcy order was made before 1 April 2004 (described as the “old cases”). All fees relating to “old cases” were abolished on 1 April 2007 following the implementation of the Insolvency Proceedings (Fees) (Amendment) Order 2007. Regulations 33 and 36 of the Insolvency Regulations 1994, dealing with the time and rate fee, continue to apply with reference to calculating the official receiver's remuneration in dealing with assets subject to a fixed or floating charge, where both the winding-up order and the realisation and distribution (if any) preceded 1 April 2004 (see Chapter 36A paragraph 36A.81).
36.4 Simplified fee structure and The Insolvency Service banking services
The FO2004 makes provision for the charging of fees in relation to insolvency proceedings in England and Wales under the Insolvency Act 1986 (IA86). It seeks in all cases to simplify the fee structure applicable in relation to insolvency proceedings under Parts I to XI of the IA86 by reducing the number of fees payable (see Annex C).
Within The Insolvency Service Estate Account Services has the responsibility for the insolvency estate banking and investment services for official receiver and insolvency practitioner estate accounts
36.5 Index
(Amended January 2010)
This chapter is divided into parts as follows:
Introduction and index (paragraphs 36.1-36.6)
Part 1 Fees and costs in insolvency proceedings (paragraphs 36.7–36.46)
Part 2 Fees on annulment (paragraphs 36.47–36.49)
Part 3 Expenses in insolvency proceedings (paragraphs 36.50–36.60)
Part 4 Petition deposit and costs (excluding partnerships) (paragraphs 36.61–36.75)
Part 5 Partnership procedures, fees, costs, and expenses (paragraphs 36.76–36.87)
Part 6 Debit balances (paragraphs 36.88–36.91)
Part 7 Fees and expenses in IVAs and FTVAs (paragraphs 36.92–36.107)
Part 8 Other matters – set-off, and transfers to liquidators/trustees (paragraphs 36.108–36.123)
Part 9 Investment of funds by liquidator and trustee (paragraphs 36.124–36.136)
Annex A Secondary legislation - Financial Regime
Annex B Revocations
Annex C Table of Fees
Annex D Fees in Partnerships
Annex E Table of Time and Rate Fees
Annex F Nominee Receipt Form
The following abbreviations are used in this chapter:
|
Abbreviations | |
|
EA2002 |
Enterprise Act 2002 |
|
FO2004 |
The Insolvency Proceedings (Fees) Order 2004 |
|
Fees Order 1986 |
The Insolvency Fees Order 1986 (as amended) |
|
IA86 |
The Insolvency Act 1986 |
|
IR 86 |
The Insolvency Rules 1986 |
|
Amendment Rules 2004 |
The Insolvency (Amendment) Rules 2004 |
|
IRegs 94 |
The Insolvency Regulations 1994 (as amended) |
|
Amendment Regulations 2004 |
The Insolvency (Amendment) Regulations 2004 |
|
IPO94 |
The Insolvent Partnerships Order 1994 |
[On to Part 1 Fees and costs in insolvency proceedings]