June 2004

36.1 Introduction

This chapter is divided into parts as follows:

Intro - General (paragraph 36.2 to 36.3)

Part 1 - Fees and disbursements payable in insolvency proceedings (paragraph 36.4 to 36.39)

Part 2 - Fast track voluntary arrangements (paragraph 36.40 to 36.49)

Part 3 - Petition deposit (paragraph 36.50 to 36.61)

Part 4 - Application of assets - company and bankruptcy (paragraph 36.62 to 36.68)

Part 5 - Priority and payment of claims (paragraph 36.69 to 36.118)

Part 6 - Other matters (paragraph 36.119 to 36.133)

Part 7 - Administration of partnership assets (paragraph 36.134 to 36.149)

Part 8 - Administration of deceased debtors' estates (paragraph36.150 to 36.151)

Part 9 - Debit balances (paragraph 36.152 to 36.154)

Part 10 - Investment of funds by liquidator and trustee (paragraph 36.155 to 36.160)

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 - Guidance on distributions

Annex G - Nominee Receipt Form

Annex H - Summary detailing how to account for assets realised and payments made

Annex I - Example of distribution from joint and separate estates under the Insolvent Partnership Order 1994

The following abbreviations are used in this chapter:

36.2 General

Under the provisions of the Enterprise Act 2002 (EA2002) The Insolvency Service has a new, modernised financial regime. The new regime introduces a simplified fee structure bringing increased transparency. The principle of the new 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 new general Secretary of State's administration fee chargeable only in compulsory insolvencies. This will involve some cross subsidy between case administrations but will eliminate cross function subsidy as the costs of investigations and enforcement activities will be paid for centrally.

Notes:[EA2002]

The Insolvency Proceedings (Fees) Order 2004 (Fees Order 2004) 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 Fees Order 2004 revokes all previous Fees Orders save for the Secretary of State fees (see paragraph 36.35 and Annex B).Regulations 33 and 36of IRegs94, the time and rate fee, continues 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 paragraph 36.93).

The Fees Order 2004 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 Insolvency Act 1986 by reducing the number of fees payable (see Annex C).

Within The Insolvency Service OR Banking Section has the responsibility for the insolvency estate banking and investment services for official receiver estate accounts. The IP Banking Section is responsible for estate banking and investment services for insolvency practitioner estate accounts.

Notes:[Fees Order 2004] 36.2

36.3 Treatment of disbursements and centralised cashiering

The key message in this chapter is that the treatment of disbursements on estate accounts depends on the date of the insolvency order.

In general, invoices for case disbursements where the insolvency order was made prior to 1 April 2004 will be processed as they were in the past and authorised invoices sent to OR Banking Section for payment. Invoices received after April 2004 and relating to cases where the insolvency order was made on or after 1 April 2004 will be sent to Finance Section.

Instructions in this chapter for disbursements to be sent to OR Banking Section are for those offices whose cashiering function has been centralised. Offices who use London Cashiers Section should continue to send disbursements either to London Cashiers or Finance Section as directed by this chapter.