The Business Debt Arrangement Scheme is a statutory debt management tool launched by the Scottish Government in December 2014. It was introduced to help partnerships, trusts or an unincorporated body of persons to repay their creditors.

The Business Debt Payment Plan (DPP) allows the debtor to pay off their debts over an extended period of time while giving them protection from their creditors taking action against them to recover the debt.  The DPP under business DAS can only last for a maximum of 5 years. If approved, it will freeze all interest, fees, penalties and other charges on the debt.

Unlike the DAS, which requires the DPP to prepared and submitted by an approved money advisor, the DPP for a Business DAS must be prepared and signed off a licensed insolvency practitioner. The insolvency practitioner will also conduct an annual review to ensure the ongoing viability of the business.

What you need to know

Businesses, like individuals, can suffer from too much debt and this is often exacerbated by the lack of access to finance. A number of factors, such as high borrowing, high overheads, onerous credit terms, variable costs and bad debts, can lead to significant cash flow challenges for small businesses. Once creditors are chasing for payment the small business owner(s) has two options: try to save the business while attempting to settle outstanding accounts or allow the business to fail by implementing an exit strategy that minimises the financial consequences.

The Debt Arrangement Scheme (Scotland) Amendment Regulations 2014 came into effect on 11 December 2014 providing the support and guidance to allow small businesses to fulfil their obligations to creditors and continue to trade: a win win scenario for the economy.

The Business DAS has limitations in terms of what businesses can apply and it defines debtors as being:

  • a legal person
    • a partnership
    • a limited partnership within the meaning of the Limited Partnerships Act 1907(7)
    • a corporate body other than a company registered under the Companies Act 2006(8)
  • a trust
  • an unincorporated body of persons

Limited companies and Limited Liability Partnerships (LLP’s) do not qualify for the Business DAS.

Key Facts

  • The applicant’s business must be in Scotland or have been formed under Scots Law.
  • Unlike the traditional DAS, the Business DAS must be signed off by a licensed insolvency practitioner.
  • Business DAS proposals must receive relevant consents from interested persons such as each partner in a partnership, each general or limited partner in a limited partnership, the majority of trustees in a trust and, a person authorised to act on behalf of an incorporated or unincorporated body.
  • All qualifying debts must be included at the time of application. However on-going liabilities, such as supplier debts, will not be considered a debt unless they become “due” and remain unpaid.
  • A declaration of viability must be submitted with a Business DAS application.
  • Where a debtor is a charity the Office of the Scottish Charity Regulator (OSCR) must be notified of the application; acceptance, rejection, revocation, completion of the DPP.
  • Insolvency Practitioners must review the viability of the business every 12 months and must apply for revocation where no longer viable.
  • All cases must be completed within 5 years
  • The DAS register has been updated to allow for searches for Business DAS cases.

When to consider the Business DAS Scheme

To be eligible for the Business DAS scheme, businesses must:

  • apply through an insolvency practitioner,
  • have their established place of business in Scotland,
  • be formed under Scots law, and
  • be carrying on business in Scotland.

Next steps

SKSi will review your financial circumstances and prepare a budget with you showing what you can realistically afford to pay towards your debts on a monthly, basis. Once your circumstances have been assessed, and your budget agreed, our money advisor will work with one of our insolvency practitioners to prepare the DPP and submit it to your creditors for approval.

Creditors will then have 21 days to formally object and if no objections are received it is submitted to the DAS Administrator (the Accountant in Bankruptcy) for approval. If any of your creditors do object, then the DAS Administrator has the authority to overturn this objection if they consider the proposal to be ‘fair and reasonable’ to all parties concerned.


The Scottish Government has recognised that the DAS model has been successful in tackling consumer debt and has a role to play in addressing business debt. As such, the new introduction of the Business DAS now provides a formally recognised debt support tool for a sector which is paramount to the economy and local community. The Business DAS not only allows small businesses to survive, it also ensures that creditors are paid which can only be good for the economy. The success of the Business DAS rests on the commitment of the debtors to work with Insolvency Practitioners to demonstrate the continued viability of the business throughout the duration of the case.

Further information in relation to the Business Debt Arrangement Scheme can be found at the Accountant in Bankruptcy (AIB) website: