The Insolvency Proceedings (Fees) (Amendment) Order 2007

EXPLANATORY NOTE

(This note is not part of the Order)

This Order makes amendments to the Insolvency Proceedings (Fees) Order 2004 (S.I. 2004/593) (“the principal Order”). It also revokes the Bankruptcy Fees Order 1984 (S.I. 1984/880, as amended), the Companies (Department of Trade and Industry) Fees Order 1985 (S.I. 1985/1784, as amended) and the Insolvency Fees Order 1986 (S.I. 1986/2030, as amended) (“the old fees Orders”), which Orders were partly revoked by the principal Order, except for savings in respect of certain fees and certain cases. In the case of the Bankruptcy Fees Order 1984 and the Companies (Department of Trade and Industry) Fees Order 1985, the saved fees continued to be applicable to cases that were commenced under the earlier Bankruptcy Act 1914 (c.59) or the Companies Act 1985 (c.6) before 29th December 1986. In the case of the Insolvency Fees Order 1986, the saved fees continued to be applicable to cases that were commenced under the later Insolvency Act 1986 (c.45) after 29th December 1986 but in respect of which a winding-up or bankruptcy order was made before 1st April 2004 (“the old cases”).

As a consequence of the increase in the deposit (see below) payable in respect of a bankruptcy petition presented under section 264(1) of the Insolvency Act 1986, article 2(2) of the Order increases to an equivalent amount the fee to be paid to an insolvency practitioner appointed by the court under section 273(2) of that Act to prepare a report under section 274 of that Act.

Article 2(3) increases the amount of the various deposits payable pursuant to article 6 of the principal Order.

Article 2(4) reduces the deposit payable under article 7(1) of the principal Order in connection with the registration of a voluntary arrangement and the performance by the official receiver of the functions of nominee in relation to such an arrangement.

As a consequence of the increase in Fee B1 (see below), article 2(5) amends article 8 of the principal Order, which makes provision for the reduction of that fee upon the approval of an individual voluntary arrangement. Since the fee is increased from £1,625 to £1,715, the reduced fee is itself increased from £812.50 to £857.50.

Article 2(6) amends the definition of the bankruptcy ceiling in paragraph 1(1) of Schedule 2 to the principal Order by requiring the inclusion, in the calculation of that ceiling, of the interest payable under section 329(2)(b) of the Insolvency Act 1986 in respect of bankruptcy debts owed in respect of credit provided by a person who was a spouse or civil partner of the bankrupt at the commencement of the bankruptcy.

Article 2(7) makes various amendments to the Table of Fees in Schedule 2 to the principal Order. It reduces the fee currently payable to the Secretary of State to register an individual voluntary arrangement, fee IVA1, from £15 to £10. It also increases the fees designated as Fee B1 and Fee W1, payable in respect of the official receiver’s general duties on the making of a bankruptcy or winding-up order, including his duty to investigate and report upon the affairs of bankrupts and of bodies in liquidation, from £1,625 to £1,715 in bankruptcies, and from £1,950 to £2,090 in winding ups.

Article 3 makes provision for the revocation of the old fees Orders referred to above and also makes consequential amendments to the principal Order and the Insolvency Proceedings (Fees) (Amendment) Order 2006 (S.I. 2006/561). The effect of the revocations is that the fees required to be paid in respect of old cases for the performance by the Secretary of State of his general duties fixed by reference to a percentage of an amount paid into the Insolvency Services Account by trustees, liquidators or the official receiver, will be abolished on the commencement date. This means that no fees will apply to such old cases except for the fee that must accompany every request for the purchase of any government securities made by a trustee in bankruptcy under the Bankruptcy Act 1914 (c.59), or by a liquidator under the Companies Act 1985, as is continued to be expressly provided for by article 4(4) of the principal Order.

Article 4 contains transitional provisions.

No regulatory impact assessment has been prepared for this Order.