Explanatory note

This Order amends the Insolvency Practitioners and Insolvency Services Account (Fees) Order 2003 (S.I. 2003/3363) (“the principal Order”) by increasing the fee to be paid in connection with authorisations by the Secretary of State and by inserting a new fee where unclaimed or undistributed dividends or other monies are paid into the Insolvency Services Account. Section 415A, under which this Order and the principal Order are made, was inserted into the Insolvency Act 1986(c.45) by section 270 of the Enterprise Act 2002 (c.40).

Article 3 of the principal Order makes provision for the payment of a fee in respect of an application pursuant to section 393 of the Insolvency Act 1986 for an authorisation to act as insolvency practitioner. It also makes provision for the payment of fees in respect of the maintenance of authorisations granted pursuant to section 393. The fee to accompany an application for authorisation to act as an insolvency practitioner and for the maintenance of such an authorisation prior to the coming into force of this Order was £2,500. This fee no longer covers the costs associated with the processing of applications and monitoring of authorisations. Accordingly article 3 of this Order increases the fees to £2,550 to cover the costs associated with deciding applications for authorisation and to recover the costs associated with the monitoring of insolvency practitioners authorised by the Secretary of State including the making of monitoring visits and the handling of complaints. Article 3(5) of the principal Order makes provision for reduction of the same fee in respect of the maintenance of the authorisation in cases where the authorisation has less than a year to run.

Article 5 and the Schedule to the principal Order make provision for the payment of fees in relation to the operation of the Insolvency Services Account. Regulation 18 of the Insolvency Regulations 1994 (S.I. 1994/2507) requires, in the case of a company wound up by the court, and permits, in the case of a voluntarily winding up, a liquidator of a company which has been dissolved to pay into the Insolvency Services Account any unclaimed or undistributed dividends held by him (“unclaimed funds”). Two new provisions inserted into those regulations (regulation 3B and 3C) makes corresponding provision with respect to monies held by an administrator or administrative receiver save that the provisions are not mandatory but permissive. Article 4 of this Order inserts two new fees, Fee 2A and Fee 2B, into the Schedule to the principal Order payable upon the making of any payments into the Insolvency Services Account under the new regulations. The fee is £25 in respect of the any one payment in of any unclaimed funds, in respect of each company to which those funds relate.

A regulatory impact assessment was prepared for the Enterprise Act 2002. This deals with the restructuring of the system of insolvency fees. Copies of this assessment are available from the Policy Unit, The Insolvency Service, 21 Bloomsbury Street, London, WC1B 3SS. No regulatory impact assessment has been prepared for this Order.