Hi all, I fully agree this is frustrating and unfair on clients. Unfortunately the IP's are bound by the insolvency rules and cannot physically complete the IVA until all funds are distributed. Also it will not be the full amount of VAT that is refunded to the IVA cases, only a percentage, which can be estimated but is not certain until the refund is received.
It appears that the delay now is with HMRC as IP's who submitted the refund request are awaiting the refunds. Our IP's are on the phone to chase this up daily but HMRC are still dealing with complications at their end before the refunds can be issued.
To be fair, Paul, this has been dropped on HMRC as much as on the IP's !! And, in the present climate, they are under the cosh as it is, as well as being saddled with a government designed system not fit for purpose.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
HMRC are loosing staff themselves and struggling to cope with the day to day stuff, so having this added to their pile of woes is causing further stresses !
However, however much I sympathise with HMRC, I have strong concerns over the impact this is having on individuals in IVA's awaiting their completion notices. Life does not move on until you are removed from the register, and have that piece of paper - although you have ceased paying your monthly payments you have it hanging over your head, and whilst the IVA has not been concluded the windfall element still exists for individuals and this simply is not fair in my opinion.
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
I continue to disagree that cases cannot be closed due to this ruling. It is in no way certain that HMRC will refund the monies due to the estates, IPs have been advised that they do not have to make the claims should they not wish to and if they do then there has to be some complex calculation of how to divide the monies amongst the estates. In many circumstances it is probably not worth making a claim at all - due to the input VAT IPs will have already reclaimed against the output VAT collected.
I have recently been subjected to a routine regulatory inspection where this issue was raised with the IPA. They see no reason not to continue closing cases, and I have also agreed this with both major creditor representatives. It is business as usual in my practice therefore - and whilst certain IP firms will clearly benefit from a short-term windfall, the rest of us are left having to restructure our businesses to now be partial exempt and are therefore carrying a substantial additional overhead which was unwelcome and in my opinion unecessary. So unless my regulator tells me that I cannot close cases, or creditors submit objections to me directly, I am carrying on as normal - and we are all eagerly awaiting the Counsel's opinion that all of the regulatory bodies have commissioned, which will hopefully give additional guidance either way.
I don't think that anyone can force their IP at present to close their case if that particular IP or their firm has strong views about whether to close it or not. We have no definate guidance on this - so we are all interpretimg the rulings as we best see fit.
I would love to see how a windfall would be treated in such circumstances, were one to be recieved after all the usual instalments had been paid - and as I have said countless times on this forum, if the period for which the IVA was set has expired - the IVA has concluded. This is a matter of fact, and unless the IP has grounds to extend it under the terms of the IVA, it cannot be held open - there is strong case law on this particular point.
It is possible for an IP to discharge you from any liabilities in the IVA after you have made all expected payments if the only hold up is a ppi claim that you have nothing to do with?
Meaning any windfalls landing after this discharge would not be captured by the IVA?
It would make it look less fishy for clients who believe that IP's are dragging their heels over discharges(some posters report 8 months and longer for certificate issue).
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
Good to see you back Mel, we have missed you!, it's very interesting to see how different IP's are dealing with this, but there definitely needs to be some uniformity as it seems very unfair that depending on who you are with could mean the difference in seeing your IVA conclude promptly or not, hopefully the situation should be clarified by the time mine finishes!
Mel,
have spoken in depth with my IVA company - RSM Tenon - and they say that their regulatory body IPA (Insolvency Practitioners Association) is advising them NOT to close cases until VAT refunds are received...
I have mentioned that this contradicts your views, and they were curious to know which body you are regulated by, as they obviously take a different view to closures...
If I had concluded my IVA and had to wait six months plus for formal notification before it was closed I wouldn't be too happy.
Just waiting for someone who is in this position to receive a windfall !!
