Once an Insolvency Practitioner has been appointed they are required to investigate the affairs of the Company, and the conduct of the Directors (amongst other duties). The resulting investigations previously lead to either a ‘D2’ return or ‘D1’ report, depending on the outcome. Once the submissions were made, it is then in the hands of The Department for Business, Innovation and Skills (BIS) as to whether they undertake further investigations (and possibly disqualification) to be in the public interest.
Important amendments to the process
A few months ago significant changes were made to the submission process. When these reports were submitted in paper format, the office holder (insolvency practitioner) could offer opinion on any findings. For example, if HMRC were the principle creditor but payments had been made to reduce this amount, then the insolvency practitioner could argue that the company could not have retained HMRC funds to finance trade. Unfortunately, the reporting submission process has since been “streamlined”, making the form digital, and more importantly, is a more “formulated” report, which no longer allows for the insolvency practitioner to add supporting commentary or professional opinion. In fact, it is really a ‘box ticking’ exercise to pre-formatted questions. This means that it is solely the choice of BIS (without the professional opinion of the insolvency practitioner) to decide if further questions should be asked of either the insolvency practitioner, director(s), or the accountant. In summary, accountants and directors should expect to receive correspondence from BIS following an insolvency procedure, however these further questions should not be considered a pre-curser to disqualification proceedings.
The Insolvency Experts offer professional support
When we give advice, we will try to ensure that any scenario is anticipated so that any questions can be answered in an efficient and professional manner. Should you require any further information or have any queries, please do not hesitate to contact us. You can call our office directly on 03339203308 or contact us online.