Our consultation setting out our plans for the 2022/23 levy rules closed on 9 November. We’ve published our policy statement with the formal levy rules, and updated the levy estimate.
We had 26 responses to the consultation, and the majority of respondents welcomed our proposals.
The policy statement confirms that:
- the evidence we have shows the insolvency risk model operated by D&B is working well
- the majority of schemes paying a risk-based levy will see their levy fall
- we’ll keep the measures in place that we introduced in 2021/22 to support schemes through the pandemic – the Small Scheme Adjustment, lower cap on the risk-based levy and the COVID-19 easement option
- we’ll introduce, for the minority of schemes that do see increases and for 2022/23 only, a limit of 25 per cent on increases to individual schemes’ risk-based levy compared to 2021/22. This reflects our monitoring and stakeholder feedback about the extent to which forced closure of businesses during the pandemic has affected insolvency risk scores
- we’ll update the rules covering commercial consolidators and schemes without a substantive sponsor (or SWOSS), and clarify through guidance the limited circumstances in which the rules would apply
Following the introduction of the 25 per cent limit on increases in the risk-based levy, we’ve updated our levy estimate including to reflect market movements and changes in insolvency risk scores up to October.
We’ve concluded that we can update the estimate of the amount of levy we expect to collect in 2022/23 to £390m. This is a reduction of £130m from the previous levy year, and means we’ll have reduced the levy by over £200 million since 2020.
We’re grateful to everyone who engaged with us on this consultation and whose views have helped inform our approach.