Historically, regulations 28(3) (BKY) and 14(3) (CWU) of the Insolvency Regulations 1994 required the trustee or liquidator to send an account of their receipts and payments to the Secretary of State within 14 days of the final general meeting of creditors being held. This meant that there were always at least 13 weeks between the issuing of the final report and the holding of the final meeting of creditors. As the Estates Accounts Service (Now Estate Accounts and Scanning, “EAS”) would not close the ISA until the final receipts and payments account had been received, it is not surprising that adequate provision for the banking charges was not always made, especially when the 13 week period coincided with a quarter end.
Happily, life is somewhat simpler now due to an amendment of the Insolvency Regulations in October 2017. Just in case you didn’t pick up on the changes, this blog sets out the new reporting requirements. The requirement is exactly the same for BKYs and CWUs albeit with different regulation, rule and section numbers. I have set out the detail for BKY first and then provided a summarised version with the CWU references.
Regulation 28(3) now says: “where a report has been sent pursuant to section 331(2A)(a), the trustee shall, within 14 days of sending the report, send to the Secretary of State an account of his receipts and payments as trustee which are not covered by any previous account so sent by him, or if no such account has been sent, an account of his receipts and payments in respect of the whole period of his office.” The amendment removes the reference to meetings and refers to a final account instead.
Regulation 14(3) now says much the same thing for CWU, referring to the account sent to creditors under section 146(3)(a) instead of the old wording that mentioned meetings.
In both BKY and CWU, therefore, within 14 days of sending the final account to creditors you should email a copy of your final receipts and payments account to the EAS at CustomerServices.EAS@insolvency.gov.uk with a covering letter detailing the date on which you sent the final report to creditors and asking that they close the ISA and send you a final statement. For those using our document packs, the BKY letter to EAS is BKY1719, and the CWU letter is CWU1821.
Upon receipt of the receipts and payments account EAS will close the case financially on their system so that no further quarterly banking charges are applied. The new Regulations have the advantage of meaning that you do not need to calculate whether any quarterly banking fees fall due in the 8-week challenge period for creditors and retain funds to meet them. You do, however, need to be alive to any banking fees falling due around the time that you send the final account to creditors as they may be applied before you manage to email the final receipts and payments account to EAS. EAS will still require you to clear any debit balance arising from quarterly banking charges being applied prior to them receiving the final receipts and payments account.
The other issue we sometimes see is that interest has been applied to the ISA account after the final report has been issued. As you will have stated in your notice to creditors that your administration of the estate is complete, you will not be able to deal with this additional interest. In order to prevent this happening, please remember to send an email to the EAS to ask that the ISA is taken off interest bearing status as an early step in your closing procedures and prior to completing your final receipts and payments account and final report. For those of you using our document packs the BKY letter to EAS is BKY1700 and the CWU letter to EAS is CWU1800.
Finally, don’t forget that under section 298(8A), once the 8 week notice period given to creditors and the debtor in respect of the final account has elapsed, a notice of final account has to be sent to the Court or Office of the Official Adjudicator (the OR’s office with responsibility for the case acting on their behalf), depending upon who made the Bankruptcy Order in BKYs. A copy of that notice also has to be sent to the Secretary of State (EAS acting on their behalf) and the OR who had responsibility of the case. In CWUs, rule 7.71(3) requires the liquidator to send to EAS and the OR a copy of the notice of final account sent to the Court and Registrar of Companies under section 146(4). That copy notice is again only sent by email, to the same email address used for the receipts and payments account. For those using our document packs the letter to accompany the notice is BKY1714 in cases where the Court made the Bankruptcy Order, and BKY1722 in cases where the Office of the Official Adjudicator made the Order. In CWUs it is CWU1814.
