Information disclosure Gateways with other government departments: Department for Business, Skills and Innovation (BIS): Insolvency Service Disqualification Unit
BIS Insolvency Service Disqualification Unit
Insolvency practitioners and Official Receivers report unfit conduct by directors of insolvent companies to The Insolvency Service’s Disqualification Unit. The Insolvency Service is an Executive Agency of BIS. The unit determines whether to commence disqualification proceedings to prevent a person from acting as a company director in the future.
Why share information with the Disqualification Unit?
The Disqualification Unit may need tax information to show a course of conduct by the director, for example details of the director’s failure to keep PAYE up to date or to issue VAT invoices. This information may not always be available from the company’s own records.
Ensuring information is shared lawfully
As set out at IDG40630 liquidators, administrative receivers and administrators ‘stand in the shoes of’ the company. However the Disqualification Unit is within BIS and so is regarded as a third party.
Part 9 of the Enterprise Act 2002 provides several gateways for the disclosure of HMRC information. It enables information collected by HMRC in the course of officers’ duties under the Customs & Excise Management Act 1979 (CEMA) or the Value Added Tax Act 1994 (VATA) to be disclosed to anyone having functions under certain legislation. For further information see IDG55200.
Applications for a disqualification order, or accepting a disqualification undertaking
Section 7(4) of the Company Directors Disqualification Act 1986 (CDDA) now provides the Secretary of State (for BIS) or the Official Receiver to require any person (including HMRC) to:
- furnish him with information in respect of a person’s conduct as a director of a company which has at any time become insolvent, and
- to produce and permit inspection of such books, papers and other records as are considered by the Secretary of State or the Official Receiver to be relevant to that person’s conduct as such a director
for the purposes of:
- making an application for a disqualification order, or determining whether to make an application for an order; or
- accepting a disqualification undertaking, or determining whether to accept an undertaking
Disclosure by consent
Other information held by HMRC may only be disclosed to the Disqualification Unit with the consent of the company (see IDG30210 for further guidance regarding consent). This consent should be provided by the liquidator, administrative receiver or administrator appointed to deal with the company’s affairs. Generally BIS will automatically supply you with a consent from the relevant company (via its insolvency practitioner) prior to making a request for HMRC information.
Which part of HMRC can disclose this information?
Requests for information from the Insolvency Service are centralised at Worthing as part of a written agreement. Please follow the instructions in the Insolvency Manual at INS9730 and INS9735.
Information which can be disclosed
Disclosure must be limited to information about the company that it would ordinarily be aware of. For example:
- correspondence between HMRC and the company
- details of payments made by the company
- reports of meetings attended.
You must not disclose:
- internal HMRC memos which the company would not be aware of
- information about the directors’ personal affairs.
Procedure to follow
You must ensure the Disqualification Unit has provided a consent from the liquidator, administrative receiver or administrator appointed and that only information as described above is supplied.
You cannot supply any information about the directors’ personal affairs as they have not given their consent to the disclosure.
Legislation which allows disclosure
Information obtained by HMRC in connection with functions under CEMA or VATA may be disclosed under a gateway provided by Part 9 of the Enterprise Act 2002 (see IDG55200).
Disclosure may also be by consent, see IDG30210.
The Insolvency Service may ask you to provide them with documents or information under powers conferred on them by section 447(3) of the Companies Act 1985. This provision is not binding on the Crown and you cannot disclose any requested information using that section.
This guidance applies to the whole of the United Kingdom.
If you receive a request for information and are unsure how to proceed, please contact your Data Guardian for advice.