When charging fees on a time costs basis we use charge out rates appropriate to the skills and experience of the relevant member of staff and the work that they perform.  This is combined with the amount of time that they work on each case, recorded in 6 minute units with supporting narratives to explain the work undertaken.

Our Charge-out Rates

These charge-out rates charged are reviewed on 1 April each year and are adjusted to take account of inflation and the firm’s overheads.

Time spent on casework is recorded directly to the relevant case using a time recording system incorporated into the case management software and the nature of the work undertaken is recorded at that time also. The work is generally recorded under the following categories:

• Administration and Planning.

• Investigations

• Realisation of Assets.

• Creditors

• Trading

• Case specific matters.

When we seek approval of time costs as a basis for remuneration, we will out a fee estimate.  That estimate acts as a limit on our time costs so that we are unable to draw fees in excess of the estimated time costs without further approval from those who approved our fees at the outset.  When seeking approval for our fees, we will disclose the work that we intend to undertake, the hourly rates we intend to charge for each part of the work, and the time that we think each part of the work will take.  We will summarise that information in an average or blended rate for all of the work being carried out within the estimate.  We will also state whether we anticipate seeking further approval to exceed the estimate and, if so, the reasons that we think that further step may be necessary.

The disclosure we make will include sufficient information about the insolvency appointment to enable you to understand how the proposed fee reflects the complexity (or otherwise) of the case, any responsibility of an exceptional kind falling on the office-holder, the effectiveness with which the office-holder has carried out their functions, and the value and nature of the assets with which the office-holder has to deal with.

If we subsequently seek authority to draw fees in excess of the estimate, we will state why we have exceeded, or are likely to exceed the estimate; any additional work undertaken, or proposed to be undertaken; the hourly rates proposed for each part of the work; and the time that the additional work is expected to take.  As with the original estimate, we will state whether we anticipate needing further approval and, if so, why we think it may be necessary

Regulation allows fees to be charged on a percentage of the value of the assets with which the office-holder has to deal (realisations and/or distributions).  Different percentages can be used for different assets or types of assets.  A report accompanying any fee request will set out the potential assets in the case, the remuneration percentage proposed for any realisations and the work covered by that remuneration, as well as the expenses that will be, or are likely to be, incurred.  Expenses can be incurred without approval but must be disclosed to help put the remuneration request into context.

The percentage approved in respect of realisations will be charged against the assets realised, and where fee approval for the appointment applies on a blended basis, any fixed fee and/or time costs will then be charged against the funds remaining in the liquidation after the realisation percentage has been deducted.

The disclosure we make will include sufficient information about the insolvency appointment to enable you to understand how the proposed fee reflects the complexity (or otherwise) of the case, any responsibility of an exceptional kind falling on the office-holder, the effectiveness with which the office-holder has carried out their functions, and the value and nature of the property with which the office-holder has to deal.

If the basis of remuneration has been approved on a percentage basis, then, an increase in the amount of the percentage to be applied can only be approved by the committee or creditors who approved the basis of remuneration at the outset where there has been a material and substantial change in the circumstances that were originally taken into account when fixing the level of the percentage applied.  If there has not been a material and substantial change in the circumstances then an increase in the amount of the percentage to be applied can only be approved by the Court.

Regulation allows fees to be charged at a set amount and alternative set amounts can be used for different tasks.  A report accompanying any fee request will set out the fixed fee which is proposed and the work covered by that remuneration, as well as the expenses that will be, or are likely to be, incurred.  Expenses can be incurred without approval but must be disclosed to help give context to the level of remuneration requested.

The disclosure we make will include sufficient information about the insolvency appointment to enable you to understand how the proposed fee reflects the complexity (or otherwise) of the case, any responsibility of an exceptional kind falling on the office-holder, the effectiveness with which the office-holder has carried out their functions, and the value and nature of the property with which the office-holder has to deal.

If the basis of remuneration has been approved on a fixed fee basis then an increase in the amount of the fixed fee can only be approved by the committee or creditors who approved the basis of remuneration at the outset in cases where there has been a material and substantial change in the circumstances that were originally taken into account when fixing the fee level.  If there has not been a material and substantial change in the circumstances then an increase in the amount of the fee to be applied can only be approved by the Court.

In a Member’s Voluntary Liquidation (“MVL”) the members of the company set the fee basis, which is often as a fixed fee.  In a Company Voluntary Arrangement (“CVA”) or Individual Voluntary Arrangement (“IVA”), the fee basis is set out in the proposals to creditors and creditors then approve the fee basis when they approve the specific arrangement.

With the exception of Individual Voluntary Arrangements and Company Voluntary Arrangements which are VAT exempt, the office-holder’s remuneration invoiced to the insolvent estate will be subject to VAT at the prevailing rate.

Charged at cost based upon the charge made by the Agent instructed, the reference to “Agent” includes:

• Solicitors/Legal Advisors

• Auctioneers/Valuers

• Accountants

• Quantity Surveyors

• Estate Agents

• Other Specialist Advisors

The office-holder will provide details of expenses to be incurred, or likely to be incurred, when seeking fee approval.  When reporting to the committee and creditors during the course of the insolvency appointment, the actual expenses incurred will be compared with the original estimate provided.

In accordance with SIP9 the basis of disbursement allocation in respect of disbursements incurred by the office-holder in connection with the administration of the estate must be fully disclosed to creditors.  Disbursements are categorised as either Category 1 or Category 2.

Category 1 expenses are directly referable to an invoice from a third party, which is either in the name of the estate or Business Helpline Group Limited, in the case of the latter, the invoice makes reference to, and therefore can be directly attributed to, the estate.  These disbursements are recoverable in full from the estate without the prior approval of creditors either by a direct payment from the estate or, where the firm has made payment on behalf of the estate, by a re-charge of the amount invoiced by the third party.  Examples of category 1 disbursements are statutory advertising, external meeting room hire, external storage, specific bond insurance and Company search fees.

Category 2 expenses are incurred by the firm and re-charged to the estate however they are not attributed to the estate by a third party invoice and/or they may include a profit element.  These disbursements are recoverable in full from the estate, subject to the basis of the disbursement charge being approved by creditors in advance. Examples of category 2 disbursements are photocopying, internal room hire, internal storage and mileage.

It is proposed that the following Category 2 disbursements will be charged: