FOI release

FOI21/22-155 - Regulation of IPs

Updated 14 July 2022

Our ref: FOI21/22-155

Date: 21 February 2022

Dear

Re: Freedom of Information Act 2000

Thank you for your email of 5 February 2022 in which you requested from the Insolvency Service answers to the following questions in relation to Insolvency Practitioners failing to comply with their statutory duties:

What actions does The Insolvency Service take against insolvent practitioners who do commit criminal offences by not filing their own company accounts on time and whether or not they are trading.

Are your insolvency practitioners who are directors exempt from penalties and criminal offences due to their protected status and or are they allowed to set up companies and fail to file accounts and just resign and still trade from the same address through another company.

Your request has been dealt with under the Freedom of Information Act 2000 (FOIA).

I can confirm the agency holds the information that you have requested and I have provided answers to your questions below:

1. What actions does The Insolvency Service take against insolvent practitioners who do commit criminal offences by not filing their own company accounts on time and whether or not they are trading

The Insolvency Service does not regulate individual Insolvency Practitioners (IPs). This is the function of independent Recognised Professional Bodies (RPBs), who authorise, regulate and monitor their IP members to ensure their compliance with relevant regulations. The Insolvency Service is the oversight regulator of the RPBs and their regulatory performance.

What follows is that it falls to the relevant RPB to take appropriate action against one of their IP members if they identify or are informed of a potential criminal activity in the course of their regular monitoring functions. The RPB will report criminality to the relevant authority, either directly or through the Insolvency Practitioner Regulation Section (IPRS). Depending on the offence, it may be reported to the Insolvency Service’s in-house prosecution team, who will then review the case and consider the code for Crown Prosecution in order to determine whether it meets the relevant evidence thresholds to progress.

1. Are your insolvency practitioners who are directors exempt from penalties and criminal offences due to their protected status and or are they allowed to set up companies and fail to file accounts and just resign and still trade from the same address through another company RG INSOLVENCY LIMITED that he became a director of on 1.2.2019.

Insolvency Practitioners do not have a protected status and are not exempt from penalties. They are required to comply with both insolvency regulations and legislation they might be subject to in their capacity as Practitioners, company directors, or in their everyday life.

There is no restriction on how many companies an individual can register and/or be a director of. A director would not be committing an offence simply by virtue of ceasing to trade through one company and starting through another, regardless of their address. Any penalties for failure to comply with relevant statutory requirements are a matter for the Registrar to pursue. The Insolvency Service is not part of the process.

If you are not satisfied with the response we have provided and would like us to reconsider our decision by way of an internal review (IR), please contact our Information Rights Team at foi@insolvency.gov.uk or by post at:

Information Rights Team
The Insolvency Service
3rd Floor
Cannon House
18 Priory Queensway
Birmingham
B4 6FD
United Kingdom

You also have the right to contact the Information Commissioners Office (ICO) if you wish for them to investigate any complaint you may have regarding our handling of your request. However, please note that the ICO is likely to expect an IR to have been completed in the first instance.

Kind regards

Information Rights Team

The Insolvency Service

The Department for Business, Energy and Industrial Strategy, Official receivers and the Adjudicator are Data Controllers in respect of personal data processed by the Insolvency Service. For the details about how personal data is processed by the agency, please see the full Insolvency Service Personal Information Charter here: https://www.gov.uk/government/organisations/insolvency-service/about/personal-information-charter