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Notes for Guidance - Bankruptcy (Scotland) Act 2016 (as amended)

This guidance describes the general functions of Accountant in Bankruptcy, interim trustees, trustees and commissioners in relation to their responsibilities regarding bankruptcies which started on or after 30 November 2016.


13.13 Entitlement to remuneration

The trustee is not entitled to take any remuneration from the bankruptcy estate until a determination is issued by the Accountant or commissioner(s).

In addition, except when they were the interim trustee, the trustee is not entitled to take any remuneration or reimbursement of outlays until the expenses of the interim trustee have been paid full, as determined by the Accountant or commissioner(s).

The basis for fixing the amount of the remuneration payable to the trustee may be a commission calculated against the value of the debtor’s estate which has been realised, but shall take into account the work which, having regard to that value, was reasonably undertaken by them and the extent of their responsibilities in administering the debtor’s estate.

A trustee is required to comply with SIP 9 in submitting a claim for remuneration. This requires a trustee to provide sufficient supporting information and an explanation of what has been achieved in the period and how it was achieved to enable the Accountant, or commissioner, to make an informed decision as to whether the remuneration requested is reasonable. This can be added to BASYS as a separate document or a note to the account.

If there have been any changes to charge out rates during the period being determined these should be disclosed by grades of staff, split by the periods applicable.

A trustee should also provide details and the cost of any work that has been sub-contracted out and that could otherwise be carried out by the trustee or their staff.

13.13.1 Information required by the Accountant

For claims less than £10,000.00 per year or pro rata

The Accountant will require a breakdown of the claim for remuneration by activity and grade of staff. The Accountant will also carry out a random check of claims under this amount or consider whether more detailed information is required taking into account the trustee’s cumulative remuneration and case progression.

On these occasions, the request for detailed time records will be made by telephone or e-mail to request this documentation be submitted within three working days or by a mutually agreed timescale which adheres to statutory constraints. If, after this agreed timescale the documentation is not received, the remuneration will be determined at a level which the Accountant considers appropriate or they may defer the fixing of remuneration and require the documentation to be submitted within six weeks. Future claims for remuneration may take into account any adjustment which is considered appropriate in accordance with section 133(4). The Accountant will not be able to audit any scheme of division or final accounts until this check has taken place, which may delay the distribution to creditors or discharge of the trustee.

For claims between £10,000.00 and £14,999.99 per year or pro rata

The Accountant requires a breakdown of the claim for remuneration and detailed time records. These should be submitted with the account. If they are not received, the Accountant’s staff will either phone or e-mail the trustee’s office to request this documentation be submitted within 3 working days or a mutually agreed timescale which adheres to statutory constraints. If, after this agreed timescale the documentation is not received, the remuneration will be determined at a level which the Accountant considers appropriate or they may defer the fixing of remuneration and require the documentation to be submitted within six weeks. Future claims for remuneration may take into account any adjustment which  is considered appropriate in accordance with section 133(4). The Accountant will not be able to audit any scheme of division or final accounts until this check has taken  place, which may delay the distribution to creditors or discharge of the trustee.

For claim of £15,000.00 and over per year or pro rata

The Accountant requires a breakdown of the claim for remuneration, detailed time records and the trustee’s case files. These should be submitted with the account. If they are not received, The Accountant’s staff will either phone or e-mail the trustee’s office to request this documentation be submitted within three working days or a mutually agreed timescale which adheres to statutory constraints. If, after this agreed timescale the documentation is not received, the remuneration will be determined at a level which the Accountant considers appropriate or they may defer the fixing of remuneration and require the documentation to be submitted within six weeks. Future claims for remuneration may take into account any adjustment which is considered appropriate in accordance with section 133(4). The Accountant will not be able to audit any scheme of division or final accounts until this check has taken place, which may delay the distribution to creditors or discharge of the trustee.

When case files are submitted, the trustee should still upload to BASYS copies of the relevant invoices etc. to evidence the entries within the receipts and payments.

13.13.2 Detailed time records

If the Accountant requests detailed time records the information required is as follows:

  • date a task was carried out
  • length of time taken to carry out said task
  • member of staff who completed the task including grade
  • a description of the actual work carried out for each entry (this should be proportionate to the time charged)

The Accountant will assess that the work was necessary to the administration of the sequestration, that it was carried out by the correct grade of staff, that the time taken to complete the task was reasonable.

Where the category of work does not sufficiently explain the task undertaken or where the time recorded does not appear to be consistent with the task, the Accountant will restrict or disallow time entries that do not contain a sufficient narrative describing the work carried out.

The Accountant will also disallow or restrict any entries where the work is not considered relevant to the administration. The Accountant may reduce the rate charged for work if it is considered that the task was not undertaken by the appropriate grade of staff.

The Accountant may reduce the time claimed for a task if it is considered to be excessive.

If the trustee disagrees with the determination, in addition to the option available under section 134(1) to (3) for the trustee to appeal the determination, the trustee may submit a request following the issue of the determination, or with the next account, for the Accountant to reconsider the amount determined and to make an adjustment in a future determination in accordance with section 133(4). The trustee must provide any missing information, an explanation as to why an entry should be allowed or any further document or supporting evidence which will assist the Accountant to reach a decision.

If the Accountant allows any further remuneration to be claimed, a revised determination will be issued or an amendment will be made to a future claim for remuneration in accordance with Section 133(4).

If the Accountant does not allow any further remuneration to be claimed the trustee may make an appeal to the sheriff within the appeal period of the relevant determination.

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