Fears over pension protection
The government's pension protection fund may offer a safety net to employees of failed companies, but it could pose a grave danger to the insolvency profession, experts have warned.
The government's pension protection fund may offer a safety net to employees of failed companies, but it could pose a grave danger to the insolvency profession, experts have warned.
Link: More business recovery stories
Law firm Wedlake Bell last week sounded an alarm over anti-avoidance provisions, which it believes could render insolvency practitioners liable for professional negligence claims.
Martin Arnold, partner with the firm, said: ‘The key point for IPs to note … is that, as presently drafted, the anti-avoidance provisions will operate in respect of things done, or which fail to be done, from June 11, 2003.’
‘If practitioners fail to take this into account, they could be held to be professionally negligent.’
R3, the Association of Business Recovery Professionals, said practitioners were aware of the danger, but added that the vagueness of the provisions was hampering work.
The provisions, designed to prevent employers from passing their pension liabilities off onto the PPF, will operate from June 2003 onwards, even though it is anticipated that the fund will not come into being until 2005.
The Department for Work and Pensions insisted that the changes – known as the ‘moral hazard’ clauses – would target only those ‘deliberately’ trying to dump pension liabilities.
The department said it was in discussions with industry and other stakeholders over the final form of the anti-avoidance provisions.
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...
View resourceIn recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...
View resourceIn a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...
View resourceThe first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...
View resourceInsolvency statistics in the UK for the second quarter of 2023 were the highest since 2009 with 83% of them relating to small businesses Read More...
View articleThere were 6,342 recorded company insolvencies in Q2, reflecting a 9% increase compared to the number of insolvencies in Q1, and a 13% increase compar...
View articleThe survey paints a “brightening” picture of the global economy, according to the ACCA Read More...
View articleThe pandemic may have “distorted” some economic data Read More...
View articleAdvisory firms must offer a “more supportive” and holistic approach to clients amid the economic downturn Read More...
View articleHaving a clear plan and clean data to help optimise the use of scarce resources will be key for businesses Read More...
View articleThe Coronavirus Job Retention Scheme has supported millions of jobs amid the pandemic, but with the support measure set to end in September, how can a...
View articleShift from BBL debt to equity could pose wider business implications Read More...
View article