Ch 36: Estate Accounting (May 2009)

May 2009

Chapter 36 Estate accounting

(Amended February 2012)

Introduction and index

36.1 General introduction

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

(Amended February 2012)

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 (2004/593) (FO2004) as amended by subsequent statutory instruments (see Annex A);
(b) the Insolvency Regulations 1994 (1994/2507) (IRegs 94) as amended by subsequent statutory instruments (see Annex A);
(c) the Insolvency Proceedings (Monetary Limits) Order 1986 as amended by subsequent statutory instruments (see Annex A);
(d) the Insolvency Practitioners and Insolvency Services Account (Fees) Order 2009 (2003/3363) as amended by subsequent statutory instruments (see Annex A).


36.3 Revocation of previous fee orders

(Amended February 2012)

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

(Amended February 2012)

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 Accounts and Insolvency Practitioner Services (EAIPS) has the responsibility for the insolvency estate banking and investment services for official receiver and insolvency practitioner estate accounts.

36.5 Index

(Amended February 2012)

This chapter is divided into Parts and Annexes as follows:

Introduction and index (paragraphs 36.1-36.6)
Part 1 Fees, costs and disbursements in insolvency proceedings (paragraphs 36.7–36.46)
Part 2 Fees on recall, rescission, stay or annulment of insolvency proceedings (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 (paragraphs 36.105–36.107)
Part 8 Other matters –transfers to liquidators/trustees (paragraphs 36.121–36.123).  Note paragraphs 36.108 to 36.120 regarding set-off have been moved to Annex G attached to this chapter.
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 Insolvent Partnerships Order 1994
Annex E Hourly rates applicable according to the Insolvency Regulations 1994 (IRegs 94)
Annex F Nominee Receipt Form
Annex G Set-off

36.6 Abbreviations

(Amended February 2012)

The following legislative abbreviations may appear throughout this chapter:

Abbreviation

Legislation

EA2002

The Enterprise Act 2002

FO1986

The Insolvency Fees Order 1986

FO2004

The Insolvency Proceedings (Fees) Order 2004

FAO2007

Insolvency Proceedings (Fees) (Amendment) Order 2007

IA86

The Insolvency Act 1986

IR86

The Insolvency Rules 1986

IAR2004

The Insolvency (Amendment) Rules 2004

IAR2009

The Insolvency (Amendment) Rules 2009

IAR2010

The Insolvency (Amendment) Rules 2010

IRegs 94

The Insolvency Regulations 1994

IARegs 2004

The Insolvency (Amendment) Regulations 2004

IARegs 2009

The Insolvency (Amendment) Regulations 2009

IPO94

The Insolvent Partnerships Order 1994

 

[On to Part 1 Fees, costs and disbursements in insolvency proceedings]