The Joint Insolvency Committee ('JIC') is consulting on changes to the Statement of Insolvency Practice 14, 'A Receiver's Responsibility to Preferential Creditors' ('SIP 14').
SIP 14 was last updated in 1999, and since that time, there have been considerable changes in insolvency legislation and practice. These changes have transformed not only receiverships, rendering administrative receiverships almost redundant, but also the nature of preferential creditors, first with the removal of Crown preference in 2003 and then, to an extent, its restoration, in the form of secondary preferential status for certain HMRC claims, in 2020.
Consequently, whilst SIP 14 had largely fallen into disuse, the JIC decided that the SIP should be updated not only to reflect the most recent legislative changes to the status of preferential creditors but also renamed to clarify that it applies to all types of insolvency appointment, not just receiverships. The proposed changes are also intended to harmonise the SIP in all of the jurisdictions.
A working group of the Joint Insolvency Committee (JIC) was therefore established to review SIP 14. The working group was comprised of insolvency professionals, representatives of the RPBs, a leading academic and HMRC.
(1) The principal changes to the SIP proposed are:
(2) Revisions to clarify that the scope of the SIP covered all types of insolvency appointment, not just Administrative Receivers.
(3) Revised opening paragraphs and introduction,
(4) Inclusion of a table of contents,
(5) Introduction of the modern structure of a SIP including sections for Principles, Key Compliance Standards and Provisions of General Application,
(6) Removal of the summaries of statutory provisions,
(7) Rewording to include Scotland and Northern Ireland.
The Working Group proposed a revised SIP 14 and the JIB has approved its circulation to the profession and other stakeholders for consultation.
A copy of the proposed revised SIP can be found on the R3 website (linked below) together with the version of the SIP currently in force.
The consultation will commence on 12 June 2025 and will be open for a period of twelve weeks, closing on 5 September 2025.
The JIC recognises that whilst these are extensive modifications, they are, however, only proposed changes. There is no intention to amend the SIP without careful consideration of the responses received and any plan to introduce changes will take into account any continuing challenges faced by the insolvency profession.
The JIC is now seeking your views on the proposed changes to SIP 14 and there is an opportunity in the consultation questionnaire to suggest other changes to SIP 14. The questionnaire can be found on the R3 website (linked below).
The Proposed revised SIP 14 will apply in England and Wales, Scotland and Northern Ireland and will replace the individual SIP 14s which apply in each jurisdiction.
R3's General Technical Committee, and Scottish Technical Committee will be responding to the consultation on behalf of members. However, if you wish to contribute your views, please email the R3 Technical Team at [email protected].
QUESTIONS
(1) Is further guidance required regarding the level of assistance an IP should provide to preferential creditors, particularly employees, when they are submitting their claims?
Please explain the reasons for your answer.
(2) The SIP is intended to be used by IPs and their staff although it is accepted that other stakeholders may refer to it. Should any additional content be added to the SIP for the benefit of other stakeholders? And, if so, what?
Please explain the reasons for your answer.
(3) Do you consider that including information for other stakeholders, such as paragraph 6 regarding types of charges and crystallisation, is worthwhile?
Please explain the reasons for your answer.
(4) We would welcome any feedback on the draft and revisions generally.
(5) Should any other changes be made to SIP 14?
The Joint Insolvency Committee ('JIC') is consulting on changes to the Statement of Insolvency Practice 14, 'A Receiver's Responsibility to Preferential Creditors' ('SIP 14').
SIP 14 was last updated in 1999, and since that time, there have been considerable changes in insolvency legislation and practice. These changes have transformed not only receiverships, rendering administrative receiverships almost redundant, but also the nature of preferential creditors, first with the removal of Crown preference in 2003 and then, to an extent, its restoration, in the form of secondary preferential status for certain HMRC claims, in 2020.
Consequently, whilst SIP 14 had largely fallen into disuse, the JIC decided that the SIP should be updated not only to reflect the most recent legislative changes to the status of preferential creditors but also renamed to clarify that it applies to all types of insolvency appointment, not just receiverships. The proposed changes are also intended to harmonise the SIP in all of the jurisdictions.
A working group of the Joint Insolvency Committee (JIC) was therefore established to review SIP 14. The working group was comprised of insolvency professionals, representatives of the RPBs, a leading academic and HMRC.
(1) The principal changes to the SIP proposed are:
(2) Revisions to clarify that the scope of the SIP covered all types of insolvency appointment, not just Administrative Receivers.
(3) Revised opening paragraphs and introduction,
(4) Inclusion of a table of contents,
(5) Introduction of the modern structure of a SIP including sections for Principles, Key Compliance Standards and Provisions of General Application,
(6) Removal of the summaries of statutory provisions,
(7) Rewording to include Scotland and Northern Ireland.
The Working Group proposed a revised SIP 14 and the JIB has approved its circulation to the profession and other stakeholders for consultation.
A copy of the proposed revised SIP can be found on the R3 website (linked below) together with the version of the SIP currently in force.
The consultation will commence on 12 June 2025 and will be open for a period of twelve weeks, closing on 5 September 2025.
The JIC recognises that whilst these are extensive modifications, they are, however, only proposed changes. There is no intention to amend the SIP without careful consideration of the responses received and any plan to introduce changes will take into account any continuing challenges faced by the insolvency profession.
The JIC is now seeking your views on the proposed changes to SIP 14 and there is an opportunity in the consultation questionnaire to suggest other changes to SIP 14. The questionnaire can be found on the R3 website (linked below).
The Proposed revised SIP 14 will apply in England and Wales, Scotland and Northern Ireland and will replace the individual SIP 14s which apply in each jurisdiction.
R3's General Technical Committee, and Scottish Technical Committee will be responding to the consultation on behalf of members. However, if you wish to contribute your views, please email the R3 Technical Team at [email protected].
QUESTIONS
(1) Is further guidance required regarding the level of assistance an IP should provide to preferential creditors, particularly employees, when they are submitting their claims?
Please explain the reasons for your answer.
(2) The SIP is intended to be used by IPs and their staff although it is accepted that other stakeholders may refer to it. Should any additional content be added to the SIP for the benefit of other stakeholders? And, if so, what?
Please explain the reasons for your answer.
(3) Do you consider that including information for other stakeholders, such as paragraph 6 regarding types of charges and crystallisation, is worthwhile?
Please explain the reasons for your answer.
(4) We would welcome any feedback on the draft and revisions generally.
(5) Should any other changes be made to SIP 14?
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12 June 2025
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