SAM106120 - Records: bankruptcy: voluntary arrangements

Voluntary Arrangements Service (VAS) at Enforcement and Insolvency Service (Worthing) will deal with notifications that either an application for an interim order has been made, or that a creditors meeting has been arranged. Any necessary advice will be given to the Debt Management office, as will a copy of the approved proposals.

Voluntary arrangements are not available under Scottish law. But, where a trustee is appointed under a Voluntary Trust Deed for creditors, the Voluntary Arrangement procedures should be applied to the case. In Scotland Trust Deeds are dealt with by Enforcement and Insolvency Service Edinburgh.

Detailed guidance is provided in the Insolvency Manual, see INS10000 onwards.

The procedural principles of voluntary arrangement cases are the same as for bankruptcy cases. For example

  • Notifications received direct in the office with responsibility for Processing work or Debt Management office are to be referred to the Enforcement & Insolvency Service (EIS). See INS10235
  • The taxpayer / debtor may continue to receive income and / or gains that are liable to Self Assessment after the date of the interim order. Separate records are required to deal with liability to the date of the interim order, and subsequent to the date of the interim order

There are five differences

1. If an office with responsibility for Processing work (or Debt Management office) in England, Wales or Scotland learns of the interim order from a source other than from EIS see INS3309
2. In Voluntary arrangements it is considered essential that the debtor
 
  • Files any outstanding returns at the date of filing the proposals
 
  • Complies with all future obligations for filing returns and making payments of liability outside the Voluntary Arrangement by the statutory dates
3. Where the Supervisor disposes of an asset and agrees to meet all or part of any resultant Capital Gain, the tax due on the Capital Gain nevertheless remains chargeable on (and payable by) the debtor. The debtor’s SA return for the relevant year should therefore include the Capital Gain
4. In Voluntary Arrangement (VA) cases statements should continue to be issued to the taxpayer not the supervisor of the VA. You should ensure you do not set up Supervisor in capacity for VA cases
5. In voluntary arrangement cases, the individual retains control of their business and we should continue to communicate directly with the customer, or their agent (if applicable). Any agents details held on the record should not be removed (as is done with bankruptcy cases) unless you receive information that the agent is no longer acting

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