In 2025 the UK insolvency landscape is continuing to evolve. For practitioners, company directors, creditors and advisors, keeping on top of the developments is essential. Below are the key legal changes and trends to watch — and how they might impact insolvency law and practice.
1. Revised Code of Ethics for Insolvency Practitioners
From 1 October 2025 a new version of the insolvency practitioners’ code of ethics will take effect.
The update includes three major themes:
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Professional behaviour: a clearer test of what behaviour would bring the profession into disrepute and a distinction between private and professional lives.
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Role and mindset: emphasis on mindset, judgement and willingness to challenge assumptions rather than simply apply rules.
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Technology: recognising digital tools, remote working, cyber risks and digital-asset issues when carrying out insolvency work.
Impact: Insolvency practitioners must ensure compliance with these new standards, update internal policies, training and procedures. Firms should review engagement letters, conflicts, digital processes.
2. Changes to the Bankruptcy and Diligence (Scotland) Act 2024
Although a Scotland-specific law, it is worthy of note for cross‐UK comparisons and practice. Parts of the Act came into force on 25 June 2025.
Key changes include:
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Introduction of a “mental-health moratorium” giving protection from debt recovery action for people experiencing a serious mental-health crisis.
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Amended processes around recall of sequestration, trustee resignation, and the ability of the Accountant in Bankruptcy to act in certain situations.
Impact: While this is Scotland-specific, it reflects a broader trend: insolvency and personal-debt regimes are being adjusted to add more procedural protections and adapt to social / public-policy concerns. UK-wide advisors should take note of equivalent reforms and future possibilities.
3. Updates affecting Insolvency Administration & HMRC / Practitioner processes
Several “behind-the-scenes” changes which may not make headlines but matter for practitioners:
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From 10 March 2025, the VAT 7 form (used when cancelling a VAT registration) was updated to include bank-details so that the HMRC may make repayments to insolvency practitioners.
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From 11 April 2025, HMRC’s Enforcement & Insolvency Services (EIS) telephone numbers were consolidated.
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Under the Moveable Transactions (Scotland) Act 2023 (effective 1 April 2025), parties in Scotland can grant statutory pledge security over moveable assets (stock, machinery etc) and register those rights.
Impact: These process/administrative changes emphasise the importance of getting the procedural side right (forms, registrations, debtor asset records) — omitting or mis-filing can delay recoveries or reduce outcomes.
4. Insolvency & Restructuring Trends in Corporate / Governance Sphere
Although some measures date from previous Acts (e.g., the Corporate Insolvency & Governance Act 2020), their application and interpretation continue to develop.
For instance:
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The moratorium, restructuring plan and ipso-facto protections introduced by CIGA continue to be central tools for rescue-led insolvencies.
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Given the economic pressures (inflation, supply-chain issues, higher borrowing costs) many more companies may need to consider proactive restructuring rather than reactive insolvency.
Impact: Directors, advisers and creditors must keep rescue-oriented options on the table. Early engagement becomes even more important. The way that courts interpret these relief-tools will shape strategy.
5. Emerging Themes: Asset obligations, digital risks & cross-border matters
While not always formal legislation, these themes are gaining traction and will influence insolvency practice in 2025:
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Obligations under the Leasehold & Freehold Reform Act 2024 and Building Safety Act 2022 mean insolvency practitioners acting for landlord companies or property firms face greater exposure (e.g., contributions orders) when defects, safety obligations or landlord insolvency collide.
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Digital assets, cyber risk, “moveable” assets (especially offshore or crypto) create new challenges in tracing and realising value in insolvency. Though not yet fully legislated, practitioners must be equipped for this new terrain.
Impact: Firms need to ensure they have the right technical expertise, asset-tracking capabilities and legal support when dealing with newer asset classes or complex property/landlord liability issues.
Final Thoughts
2025 may not bring a single sweeping overhaul of UK insolvency law, but it brings important incremental changes across ethics, administration, personal insolvency (especially in Scotland) and the evolving asset/liability landscape. For those working in insolvency (whether creditors, practitioners, advisers or directors) the key take-aways are:
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Don’t neglect the procedural / admin side (forms, registrations, practitioner codes) — mistakes there cost time and money.
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Stay alert to the evolving asset / liability risks (property-safety obligations, digital assets) which may increase exposure or reduce recoveries.
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Early engagement remains a priority: rescue or restructuring is preferable, and the legal framework continues to favour going-concern solutions where possible.
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Keep watch on regional differences (e.g., Scotland’s reforms), as part of the UK picture may diverge.
