A new season. A new term.
The well pressed school shirts, the stiff school blazers, the shiny school shoes; September marks a fresh start for many.
For those of us specialising in the Restructuring & Insolvency sector, the first month of autumn has always marked the start of a new term in our work too. For the past two years of the pandemic, however, Septembers have come and gone with little changing, as the insolvency and enforcement landscape remained largely in lockdown.
But this September, following a lengthy period of inactivity, the Northern Ireland insolvency and enforcement system is slowly getting back in gear. Today, Monday 5th September 2022, marks the start of the new Court term. The High Court last month issued updated guidance on how insolvency matters will be handled. At a time when huge energy price hikes, excessive inflation levels and wage rise demands make the headlines daily, we anticipate that the re-commencement of certain enforcement practices shall lead to businesses facing external creditor pressure which for 30 months has effectively been put on ice.
So, what has changed?
- Debtor petitions for bankruptcies will continue to be accepted.
- From today, creditor bankruptcy petitions will be accepted if:
- the petition debt is grounded on a court judgment, decree or other court order; AND
- the petition is grounded on a statutory demand dated and served on or after 1st June 2022.
- New Crown creditors’ bankruptcy petitions may also be presented from today onwards and they will be accepted on the same basis as prior to the pandemic. This is a significant development.
- Director petitions for company winding up petitions will continue to be accepted.
- Guidance on all other company winding up petitions is placed on hold for now.
The recommencement of Crown bankruptcy petitions being processed is expected to lead to a sharp rise in personal insolvency in the coming months. Those sole trade and partnership businesses which have been defaulting on VAT, PAYE, CIS and Self-Assessment debts will now be under the HMRC spotlight once again. We are already seeing an increase in Field Officer action and final demand letters from the Revenue. Individuals and businesses affected must seek advice early to give themselves an option to get an arrangement in place with HMRC, especially now too that HMRC is a preferential creditor for VAT, PAYE and CIS taxes.
If you would like to arrange an initial in-person consultation for your client, please call us on 028 8772 4697 and we will be pleased to assist.
Posted on September 5, 2022