We would generally not use the IVA protocol if there is HMRC debt - and Michael does make a good point in that regard. IPs are required to indicate the timing of dividends within the proposal documents, so it is hard for creditors to moan too much if returns are delayed due to things like this.
I don't think it matters Melanie whether your use the Protocol compliant IVA or not.
The rule regarding Dividends is part of the IVA Proposal not the Protocol and is included within the Standard Terms and Conditions thereon.
In self employed cases any contribution shown in the I&E for tax and NIC is paid to the Supervisor for any period from commencement of IVA until the next 5th April and that amount is distributed to all creditors. Thereafter that payment is made to HMR&C.
We have no problem in using the Protocol Compliant IVA for any self employed trader.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
Surely it depends what T&Cs you use David. The point I was making about the four months is that this comes directly from the IVA protocol. Please show me other T&Cs where the four month rule is used - or are you saying that other IPs have this written into their proposals? I think not.
I agree if you are using the R3 Standard Terms and Conditions which does not set a time limited but a Supervisor can in my opinion.
This time limit is set in the PCIVA and gives certainty and crediors are happy with same.
Last edited by David Mond on Sun May 24, 2009 10:54 am, edited 1 time in total.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
Having read the thread, I am still unsure where the 4 months becomes binding to creditors. I appreciate that IVA's are binding on all parties if the majority of credit accepts the proposal. However it seems, from the posts, that the proposal may not include the specific terms in relation to the time expiry for claiming? If this is the case then how can the contract impose such the limitation legaly?
Or does the proposal just have to state that it is subject to the conditions/clauses/practices etc.. that are set out within the protocol?
Just to add, I appreciate this is more a point for the Pro's but I am also interested to know out of sheer interest [:)]
The 4 months is at the discretion of the IP concerned, and in my firm rarely used as we have excellent relations with all lenders and we badger and pester them in the early days if they have not submitted claims.
Although I have used it once or twice lately, where I have felt that creditors who do not respond need teaching a lesson. They wanted this protocol as much as IPs did, and therefore it is up to both sides to abide by it and not just one!
This is fully covered in the Standard Terms and Conditions which accompany each IVA proposal - have a look through yours and you will find it under section 17.
Clause 17 in the PCIVA allows the Supervisor discretion if crediors have not submitted their claims within the 4 months as stated.
This is to encourage dividend distributions earlier rather than later and was put in at the behest of creditors.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
