Hi Andy, they are currently on hold pending the refund from the Revenue. When these funds come in we will have to redistribute to creditors first before completing. If there are any exceptional cases were the client will suffer due to the delay in completion these would be looked at and a decision made by the IP on whether the completion could occur sooner.
Hi Gareth. As this will become a universal problem to IP's, can't some sort of compromise be reached, whereby the debtor is, at least formally absolved from most of the conditions of the IVA relating, for instance, to windfalls.
The concern of many, I imagine, is the (however unlikely) scenario of having finished paying and actually having completed THEIR obligations under the IVA, they win the lottery or come into an inheritance, which, if it were not for the delays caused by this VAT interference, they would have been able to keep, but are now going to lose.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I agree with foggy. Surely it can't be right that one company is closing IVA's and another leaving them on hold? I would have a mega foot stamping paddy if I had completed 5 years and there was a hold up!!
Yes, it would be nice if that could happen. In fact I would prefer it if we could issue the completion certificate the day that the final payment is received. After all the client has fulfilled their obligation under the IVA.
Unfortunately we are not allowed to do this under the rules laid down in the Insolvency Act and we are not allowed to complete the IVA until all funds have been distributed. If we are aware that additional funds are to come into the arrangement (and HMRC have confirmed they will) I cannot see how we could close the IVA before those funds have been paid to creditors.
You are also quite right in what you say regarding a lottery win or inheritance. As long as the case has not been officially completed any windfall must be paid in for the benefit of creditors. This may seem very unfair and I agree. Unfortunately we are all being affected by the VAT ruling. Im still trying to work out why Paymex (another IVA company) brought this case in the first place because all I can see is a delay for clients and a lot of work for IP's in trying to sort out all of the VAT refunds.
Hi Gareth - how come some companies are closing IVA's and others cannot? I can't help but feel sorry for clients of VN what with the PPI issues and now this (not being negative towards your company but it does seem there's a different interpretation of the law between companies).
Hi
I think some companies have benefitted financially from the change in VAT, hence the reason it was brought to the attention of HMRC in the first place.
If their fees included VAT then they must be due some hefty refunds ?
I cannot really answer for other IVA companies but there was a lot of confusion initialy over whether the VAT would be refunded by HMRC or not. This is now very clear, they will be refunding VAT on active cases and so I cannot see how a case can be closed when an IP knows there is money to come into the case. Our advice has been that you cannot close an IVA when you are aware of additional funds to come in.
It would be interesting to find out what other IPs intend to do with the money that they receive from HMRC for cases they have closed since submitting their VAT claim to HMRC.
You could be right. Maybe they said our fee is £XXX including VAT which means when a refund comes in it will all go to them.
Based on protocol cases I think most companies will gain some benefit on Nominees fees but any VAT refunds on supervisors fees should be going to the creditors due to the standard Tix modifications.
In any case there is going to be a lot of work involved in sorting this mess out and I think the majority of clients and IP's would prefer it if this ruling never happened.
This is pathetic and once again the person in the IVA paying for it all is getting humped!!
If the refund is only due to the IP's and then on to creditors as an extra then why cant cases be closed,certificate issued then when the refund comes through the IP can distribute it minus whatever extra fee they wish to charge.
If you have served the 5 or 6 year sentence of an IVA its horrific to think that things will be held up indefinately,and with HMRC on the case this will be a long drawn out process.
Given that everyone now knows what is VAT exempt can IP's not anticipate this claim by applying earlier than the iva end date?
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
