PracticeConsultingParliament – Ministers drop insolvency bill

Parliament - Ministers drop insolvency bill

The future of reforms to insolvency law and the limited liability status of firms looked uncertain this week after ministers looked unable to find a place for the bills in the current parliamentary session.

The ministerial committee on legislation, chaired by Commons leader Margaret Beckett, was expected to confirm yesterday that the bills would be sacrificed because of the crowded parliamentary timetable. It means they may not find a place on the statute book until next year.

After trade secretary Stephen Byers said last week that the government would reverse its previous undertaking not to raise the audit threshold from the current level of £350,000, it is the third blow for the profession in less than seven days.

The delay frustrated insolvency practitioners, who have been awaiting the introduction of a short moratorium for companies to allow them to produce a rescue plan. ‘We want to get to grips with the new law,’ said Colin Haig of Baker Tilly.

Big Five firms were outraged that LLP legislation was dropped after three years of discussion. New English ICA deputy Graham Ward said he had previously received positive signals from the DTI about its support for the bill and to have it thrown out so late in the day ‘was disappointing’.

ACCA and the English ICA also voiced concerns about the DTI’s possible increase of the audit threshold to as much as £4.2m. ‘Suggesting new levels before consultation takes place is the wrong way to go about it,’ said Gerry Acher, institute audit faculty chairman.

BDO Stoy Hayward tax partner Mark Lee said the hike could increase the number of Revenue investigations. ‘It might even employ accountants to audit accounts submitted to them.’

Analysis, page 6; Leader, page 12.

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