HMAG30061 - Registration and approval: Insolvency
Insolvency
Where the approved legal person, such as a sole proprietor, partnership or limited company, is facing a serious financial situation such as bankruptcy, liquidation (winding up), administration or needs to enter voluntary arrangements, an Insolvency Practitioner (IP) will be appointed to either save the business or find the best solution for all involved, and will in doing so may:
• sell off the business’s assets.
• collect money due.
• agree creditors’ claims; and
• distribute money collected after paying costs.
Insolvency Practitioners are monitored by regulators such as the Insolvency Service and the Office for Professional Body Anti-Money Laundering Supervision (OPBAS).
Subject to HMRC permitting the insolvent person’s approvals and authorisations to continue, the IP may carry on the insolvent person’s approved activities using the insolvent person’s existing approvals, provided approval conditions and requirements are met. At this stage, the IP does not require separate approval, and their appointment should not be considered as a transfer of a going concern.
Once notified of the IP’s involvement with the approved business, our records should be updated to confirm the involvement. If the IP can save the approved business, then the approval will continue unaffected. If the business is sold as a going concern, then the transfer will need to follow normal transfer of a going concern policy as set in this guidance Registration and approval: transfer of a going concern. Where assets sold include excise goods under suspension arrangements the IP is responsible for ensuring that the goods are removed and transported in accordance with excise law.
Where approvals are no longer required they should be revoked please refer to: Registration and approval: revocation