HMRC Insolvency Guidance On Insolvency Practitioner Appointments
Insolvency Practitioner Appointments Supported By HMRC – Bulletin 2 September 2021
Insolvency Practitioner Appointments Supported By HMRC is the focus of an HMRC Bulletin dated 2 September 2021. This refers to the fact that it can be approached by Insolvency Practitioners looking to be appointed as the Officeholder in insolvency cases in circumstances where it appears to HMRC there might be no tax compliance issues or currently progressing HMRC investigations.
SUMMARY OF KEY POINTS
- Insolvency Practitioners sometimes approach HMRC seeking support for their nomination for an appointment.
- In cases where there are no active HMRC investigations, an appointment request should explain the benefit to HMRC with evidence.
- The evidence should ideally be able to show HMRC improved returns in comparison with the appointment of the Official Receiver.
- The Official Receiver should consent to the appointment of a private Insolvency Practitioner.
Why Do Insolvency Practitioners Approach HMRC For Appointments?
The reason that Insolvency Practitioners may approach HMRC for support for appointments from time to time is that an appointment is typically reliant upon creditors who have significant influence upon who might be appointed for example as Liquidator or Trustee in Bankruptcy. The bigger the creditor then the greater the influence over such an appointment.
HMRC is typically a creditor in the vast majority of insolvency cases and also very often a large one. It, therefore, tends to have influence.
Basis Of Nomination In Cases Where There Are No Current HMRC Investigations
The Bulletin guidance says that HMRC will ONLY consider such requests from an Insolvency Practitioner to be appointed in these cases where it can be shown that the appointment of an Insolvency Practitioner will lead to a BETTER RETURNS to creditors than would be the case had no appointment (or support for the same) by HMRC been made.
Following the introduction of the Insolvency Proceedings (Fees) Order 2016, fees are now charged by the Official Receiver on all cases. An Insolvency Practitioner who wishes to obtain support from HMRC for their appointment needs to be able to show THEIR appointment will lead to a BETTER RETURN to HMRC, whilst taking into account the fees of the Official Receiver and also the fees and expenses of the Insolvency Practitioner.
How To Make The Request Of HMRC
Requests for nomination as Trustee or Liquidator in such cases should be sent to ipnominationrequests@hmrc.gov.uk.
The following information has been requested by HMRC:
- Name of company or individual.
- Company Registration Number or any known tax references.
- Date of insolvency.
- Name and license number of the IP(s) seeking nomination.
- Details of the potential recoveries.
- Explanation as to the benefit to creditors of the appointment.
- Forecast of the anticipated improved recoveries that are anticipated.
HMRC says that the request should directly apply to the circumstances of the case and if possible be supported by evidence.
It appears that HMRC wants the CONSENT of the Official Receiver to being replaced.
Fee Approval By HMRC Appointed Insolvency Practitioner
A request from an Insolvency Practitioner for fee approval following an HMRC led appointment will not automatically mean that HMRC will grant approval of such a fee request.
Suspected Fraud Cases
In cases of suspected fraud or organised criminality then HMRC says that the matter should be issued to HMRC’s fraud investigation specialists at FIScivilrecovery.external@hmrc.gsi.gov.uk.
Marketed Tax Avoidance Cases
In cases where tax debts have arisen through the use of marketed avoidance then such requests of HMRC should be sent to ca.counteravoidanceinsolvencyexternal@hmrc.gsi.gov.uk.
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Disclaimer: HMRC Appointments Of An Insolvency Practitioner
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