Insolvency FAQs.

Yes. The Insolvency Practitioners at IQ Insolvency are licensed and regulated in the UK by the Insolvency Practitioners Association (IPA). The IPA is one of the three Recognised Professional Bodies (alongside ICAEW and ICAS) that authorise individual insolvency practitioners under the Insolvency Act 1986 framework. All licensed IPs hold the mandatory statutory bond required under the Insolvency Practitioners Regulations 2005. Complaints about our conduct can be raised with us directly in the first instance, and to the Insolvency Service Complaints Gateway at gov.uk/complain-about-insolvency-practitioner. More on our regulatory framework on the About IQ Insolvency page.

Three things. First: the licensed practitioner you speak to first is the one who sees your case through to the final report. No call centres. No handoffs. No junior staff learning on your file. Second: the practice is led by a chartered accountant and licensed insolvency practitioner with over 20 years' experience — meaning every engagement benefits from the financial-analysis depth that not every IP firm can offer. Third: we work UK-wide from a Barnet office with low overhead — which translates into commercially proportionate fees rather than the multiple-of-time-cost approach that some larger firms apply.

Yes. Conversations with a licensed insolvency practitioner are protected by professional confidentiality. We do not share information with third parties (including HMRC, creditors, banks, or anyone else) without your explicit instruction. Confidentiality applies regardless of whether you proceed with engagement. The only exceptions are where disclosure is required by law (for example, suspicions of money laundering under the Proceeds of Crime Act 2002, or court orders) — and even then, the legal disclosure obligations apply to all licensed advisers, not specifically to IPs.

Our office is at 6A Nesbitts Alley, First Floor, Barnet, EN5 5XG (North London). We work UK-wide — office visits are welcome but most engagements proceed by phone, email, and video call without face-to-face meetings. We have substantive engagement experience across England, Wales, Scotland, and Northern Ireland, and we are happy to take instructions from anywhere in the UK. The IPA authorises our IPs to act as office holders across England and Wales; Scottish appointments require additional Scottish-specific procedural awareness which we can address.

Yes — and you should. The IPA Members Register at insolvency-practitioners.org.uk/find-an-ip lists all licensed IPs authorised by the IPA. ICAEW and ICAS each maintain equivalent registers. Any 'insolvency adviser' who cannot be verified against an RPB register is not a licensed IP and cannot be appointed as an office holder under the Insolvency Act 1986 — regardless of how their marketing presents them. Beware of unregulated 'insolvency advisers', 'business turnaround consultants', or 'debt management companies' who pass on enquiries to actual IPs while charging a referral premium — you can engage a licensed IP directly without paying that premium.

Yes — we welcome introductions from professional advisers, and we are happy to work alongside the client's existing accountant or solicitor throughout the engagement. The accountant typically retains responsibility for ongoing accounts and tax compliance during voluntary procedures (CVL, MVL); the solicitor often supports specific procedural matters (statutory demand defence, winding-up petition response, sale and purchase agreements in pre-pack administration). Where the client benefits from a coordinated team, we coordinate; where the client prefers to centralise communication through us, we centralise. We do not pay referral fees — introductions are based on client benefit, not commercial arrangement.

Both routes are reasonable. Your accountant knows your financial position and can often identify whether the situation requires an IP or whether non-procedural options remain (cost reduction, payment plans, refinancing, owner injection). For straightforward situations the accountant can often advise without IP involvement. For situations where insolvency procedure is being considered — or where personal-exposure considerations are material — the IP conversation typically benefits from being earlier rather than later. You can speak to us directly without going through your accountant; we will tell you honestly if we think the situation does not require IP engagement, and we are comfortable with the accountant being part of the conversation if you prefer.

Nothing is required for the first call. We can have a useful conversation based on your description of the position. If you have to hand: the most recent monthly management accounts (P&L and balance sheet); the latest creditor list with approximate amounts; any HMRC correspondence or demands; any recent statutory demand or winding-up petition; details of any personal guarantees you have given. None of this is required for the first call — we can work without it. If engagement proceeds, we will request the documents at the appropriate point in a structured way.

Typically: brief background on the company or business and the nature of the distress; realistic assessment of the position (what is and is not likely to be achievable); procedural options that may be appropriate (administration, CVL, MVL, CVA, strike-off, or non-procedural alternatives); director and personal exposure considerations (personal guarantees, HMRC personal liability, wrongful trading framework); immediate priority steps (what should and should not happen in the next 7–14 days); indicative next steps if engagement proceeds, and an indicative fee discussion. The first call typically lasts 45–60 minutes. There is no charge and no obligation.

For simple CVL and MVL engagements at the standard entry point, we can typically open the engagement within 2–5 working days of the first call — and the convening of the section 100 decision procedure (the procedural step that formally appoints the liquidator) typically follows within 7–14 working days thereafter. For more complex CVL and MVL engagements involving asset realisation work, employee considerations, or investigation requirements, the engagement opens at the same speed but the procedural timeline naturally extends. For administration appointments, the timeline depends on whether the appointment is by directors (out-of-court), by qualifying floating charge holder, or by court order — and on the procedural sequencing required (notices, statutory waiting periods, etc). For pre-pack administrations, the timeline involves SIP 16 valuation, marketing process where required, and Pre-Pack Pool / qualifying evaluator engagement under the Connected Persons Regulations 2021 — typically 4–8 weeks from first call to appointment. Earlier IP engagement materially expands the available procedural options and timeline flexibility.

No. There is no charge for the initial consultation, and no obligation arising from it. We will not invoice you for the first conversation regardless of length, and we will not pressure you into engagement. If after the initial consultation you decide engagement is not the right step, that is the end of our involvement and there is no charge. Many initial consultations result in our advice being that no IP engagement is needed at this stage — we say so honestly when that is the case.

That is exactly the right time to call. Many situations that feel critical are not — the company has runway, the creditor pressure is manageable, and non-procedural options (cost reduction, payment plans, refinancing) can resolve the position without IP involvement. Many situations that feel manageable turn out to be more advanced — particularly where directors have been carrying personal stress without sharing the position openly. The first call is precisely for distinguishing these. You can also take the Insolvency Test (anonymous, 2 minutes, no email required) for an indicative assessment before deciding whether to call.

Liquidation closes the company; administration tries to rescue it (or sell it as a going concern). Creditors' Voluntary Liquidation is the procedure for closing an insolvent company at the directors' initiative, with creditor approval. Compulsory Liquidation is closure by court order, typically following a creditor petition. Administration places the company under a licensed practitioner's control to pursue a rescue, sale, or better outcome for creditors than liquidation. Administration can lead to: rescue and return to directors; pre-pack sale to a third party or connected party; sale of the business as a going concern; or progression to liquidation if no rescue is achievable. Procedural choice depends on whether the business has rescue or going-concern value worth preserving.

CVL is for insolvent companies; MVL is for solvent companies. Creditors' Voluntary Liquidation (CVL) closes an insolvent company — the directors and shareholders initiate it, creditors approve the appointment, and the liquidator's job is to realise assets and distribute to creditors. Members' Voluntary Liquidation (MVL) closes a solvent company — all creditors are paid in full, and any surplus is distributed to shareholders. MVL is typically tax-efficient through Business Asset Disposal Relief (BADR) — subject to qualifying conditions, with effective rate 14% from April 2025 on qualifying gains up to £1 million lifetime allowance per qualifying individual. CVL produces no shareholder distribution; MVL distributions to shareholders attract capital gains treatment which is typically more efficient than dividend treatment. Indicative fee ranges differ accordingly: simple MVL typically from £2,000 + VAT + disbursements; simple CVL typically from £2,500 + VAT + disbursements — both ranges expand with case complexity.

Pre-pack administration is administration where the sale of the business is negotiated before the appointment is made, and executed immediately on appointment. The advantage is speed — customer continuity, supplier continuity, employee continuity (via TUPE), and brand value are preserved through the rapid transition rather than eroded by extended administration. The buyer can be a third party (industry consolidator, competitor) or a connected party (typically director-led continuity vehicle). Connected-party pre-packs are subject to the Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 — requiring independent SIP 16 valuation, SIP 16 statement, and Pre-Pack Pool approval or independent qualifying evaluator report. Pre-pack is the dominant procedural ending for distressed businesses with going-concern value worth preserving through speed of transition.

A Company Voluntary Arrangement is a binding agreement between a company and its creditors to repay debts (typically at less than 100p in the £) over a defined period (typically 3–5 years). The CVA proposal must be approved by 75% (by value) of voting unsecured creditors. CVA works where the underlying business is viable post-restructuring and creditor support is achievable — typical scenarios include retail and hospitality operators with viable cores but unsustainable lease portfolios, or service businesses that can trade through but cannot pay accumulated arrears. CVA is less common in some sectors (technology, transport) than in others (retail, hospitality). The IP acts as nominee during proposal stage and supervisor during implementation — but the directors retain operational control throughout.

Strike Off is the simplest closure procedure for a company — the company applies to Companies House to be struck off the register and dissolved. It is appropriate only where: the company has not traded in the previous 3 months; has no assets to distribute; has no liabilities to creditors (or all creditors have been paid); and is not the subject of any ongoing legal action or insolvency procedure. Strike-off is significantly cheaper and simpler than MVL but does not provide the formal asset distribution and tax-efficient surplus extraction that MVL offers. For solvent companies with surplus to extract, MVL is typically preferable. For dormant companies with no assets and no liabilities, strike-off is typically appropriate.

A Winding Up Petition is a court application by a creditor (or HMRC) to compulsorily liquidate the company. Once advertised in the London Gazette, the petition typically triggers immediate adverse consequences: bank account freezing, supplier withdrawal, customer concern. Time-critical action is required. Options include: paying or settling the petition debt before the hearing (which typically resolves the petition); applying to set the petition aside if it is procedurally defective; entering into a CVA or administration to halt the proceedings; or preparing for the hearing if no defence or settlement is achievable. The procedural runway is short — typically 7–14 days from petition advertisement to hearing. Earlier IP engagement materially expands available options.

A statutory demand is a formal demand for payment that, if unpaid after 21 days, allows the creditor to petition for the debtor's bankruptcy (for individuals) or the company's compulsory liquidation (for companies, subject to the £750 minimum threshold). For individuals, the demand can be set aside within 18 days under Rule 10.4(1) of the Insolvency Rules 2016 if there are grounds (genuine dispute, security held, abuse of process). For companies, the threshold for company statutory demand is £750 (the CIGA 2020 reverted threshold). Time-critical action is required: assess whether to pay, settle, set aside, or prepare a defence. Earlier IP engagement materially expands available options.

Phoenix-style restart (liquidate, start new company with same business) is achievable but subject to substantial restrictions. Section 216 of the Insolvency Act 1986 prohibits the use of the same or similar company name (the 'prohibited name') for 5 years after liquidation, except in defined circumstances (court permission, exempted purchase from a liquidator or administrator, or notice procedure). Phoenix arrangements also engage HMRC scrutiny (unfair advantage from prior debt write-off), creditor scrutiny (preference and transaction at undervalue claims), and potentially Traffic Commissioner scrutiny in transport, Charity Commission scrutiny in education charities, regulatory scrutiny in regulated sectors. Properly structured pre-pack administration to a connected buyer with disclosed pre-procedure planning produces materially better outcomes than ad-hoc phoenix attempts. We can talk through whether your situation supports a continuity arrangement.

Often yes. Time to Pay arrangements are HMRC's principal route for taxpayers who want to pay outstanding liabilities over time rather than facing enforcement. TTP arrangements typically run 6–12 months but can extend to 24–36 months in some cases. HMRC's Self-Serve TTP route handles smaller amounts (typically under £30,000) automatically. Larger amounts require Business Payment Support Service engagement, ideally with a properly prepared cash flow forecast demonstrating affordability. TTP is most readily available where the arrears are recent, the cash flow forecast supports the proposed payment schedule, and the taxpayer has engaged early rather than reactively. We can support TTP applications including the cash flow forecast preparation.

HMRC distraint — now formally 'taking control of goods' under TCEA 2007 Schedule 12 and SI 2013/1894 — is HMRC's enforcement power to seize and sell business assets to satisfy outstanding tax debt. The process typically involves: a Notice of Enforcement giving 7 days to pay or arrange payment; an HMRC Field Force visit to inspect and 'take control' of goods; a Controlled Goods Agreement giving the taxpayer a defined period (typically 7–90 days) to pay or face removal; and removal and sale at auction if no resolution is reached. The procedural runway is short — typically 7–30 days from Notice of Enforcement to crystallised loss. Time-critical engagement with HMRC, often via a licensed IP, is the principal route. More on the HMRC Tax Debt hub.

Sometimes yes. Personal Liability Notice under section 121C of the Social Security Administration Act 1992 allows HMRC to make a director personally liable for PAYE and NIC arrears in defined circumstances — principally where HMRC believes the failure to pay was attributable to the director's neglect or fraud. PLN exposure is materially elevated in workforce-intensive sectors (transport, construction, hospitality, education) with concentrated PAYE / NIC arrears. For VAT, criminal liability under section 72(11) VATA 1994 is rare but possible in fraud cases. HMRC also has VAT security demand powers under Schedule 11 paragraph 4(2)(a) VATA 1994 — requiring a security deposit before VAT registration is allowed to continue. Each is a distinct exposure that needs separate assessment — covered in the HMRC Tax Debt umbrella and the linked Tier 1 spokes.

Since 1 December 2020, HMRC ranks as a secondary preferential creditor for VAT, PAYE income tax, employee NICs, CIS deductions, and student loan deductions held in trust by the company. This 'Crown preference' means HMRC ranks ahead of unsecured creditors and floating charge holders for these specific tax debts — materially reducing recoveries to floating charge lenders and unsecured creditors in insolvency procedures. Crown preference does NOT cover Corporation Tax, employer NICs, Climate Change Levy, or any HMRC penalties or interest — those tax debts remain ordinary unsecured. The distinction is meaningful for procedural choice and creditor-engagement strategy.

Depends on the situation. Where the position is recoverable through TTP and operational cash flow, HMRC and your accountant are the first calls — structured engagement directly with HMRC's Business Payment Support Service often resolves the position without IP involvement. Where TTP has already failed, where enforcement action has begun (Field Force visit, distraint, security demand, petition threat), or where personal liability concerns are emerging — the IP conversation should typically come first. Earlier IP engagement materially expands available pathways. Calling us does not commit you to engagement — we will tell you honestly whether the situation requires IP involvement or whether continued direct HMRC engagement is appropriate.

Criminal prosecution for unpaid tax is rare in the UK but possible — particularly where fraud is alleged. Section 72(11) of the VAT Act 1994 creates criminal offences for VAT fraud. PAYE / NIC fraud can be prosecuted under various tax fraud provisions. Civil HMRC enforcement (interest, penalties, distraint, petition) is far more common than criminal prosecution. Where HMRC is investigating tax fraud allegations, specialist tax fraud counsel engagement (separate from IP engagement) is typically essential. The IP conversation can address civil enforcement and procedural options; criminal allegations require separate specialist representation.

Generally no — but it depends on your specific situation. Limited company directors are typically protected from company creditors by the corporate veil — company debts do not transfer to the director personally on liquidation. However: personal guarantees you have given (commonly to lenders, equipment finance providers, landlords, and some major suppliers) are direct personal liabilities that survive corporate liquidation; HMRC personal liability (under section 121C SSAA 1992 Personal Liability Notice) crystallises PAYE / NIC exposure directly to the director where neglect or fraud is alleged; wrongful trading under section 214 IA 1986 can result in personal contribution orders where directors continued trading after insolvency became unavoidable. Where total personal exposure exceeds personal asset value, bankruptcy may follow — which can affect home ownership depending on equity, mortgage, and family structure. Specific assessment is essential.

Wrongful trading under section 214 of the Insolvency Act 1986 applies where: the company has gone into insolvent liquidation; before the liquidation, the director knew or ought to have concluded that there was no reasonable prospect of avoiding insolvent liquidation; and the director continued trading thereafter. Where wrongful trading is established, the court can order the director to make a personal contribution to the company's assets — typically representing the increase in deficit during the wrongful trading period. The defence under section 214(3) is that the director took 'every step with a view to minimising the potential loss to the company's creditors' that he or she ought to have taken. Re Produce Marketing Consortium [1989] is the leading authority.

Section 212 of the Insolvency Act 1986 — misfeasance — allows a liquidator or creditor to claim against directors who have misapplied or retained company property, or who have been guilty of any misfeasance or breach of fiduciary duty in relation to the company. Unlike wrongful trading (which focuses on the wrongness of continued trading after insolvency was unavoidable), misfeasance focuses on specific wrongful acts — improper dividend payments, improper director remuneration, transactions at undervalue, preferences, or misapplication of company funds. The two can be claimed cumulatively in the same procedure. Both produce personal contribution orders against directors. Specific factual assessment is essential.

Director conduct is investigated in every CVL and compulsory liquidation under the Company Directors Disqualification Act 1986. The liquidator submits a director conduct report to the Insolvency Service within 3 months of appointment. Where unfit conduct is established, the Secretary of State can apply for a disqualification order (typically 2–15 years depending on severity). Many liquidations conclude without disqualification proceedings — the director conduct review confirms no unfit conduct and the matter ends. Common triggers for disqualification proceedings include: trading while insolvent (wrongful trading), preferences and transactions at undervalue, HMRC neglect, accounting failures, or misappropriation of company assets. Honest engagement with the liquidator and prior IP engagement materially reduce disqualification risk.

Personal guarantees are direct personal liabilities and typically survive the corporate liquidation. The lender or guaranteed party can pursue you personally for the amount guaranteed. Options include: paying the PG amount (where assets allow); negotiating a reduced settlement (often achievable, particularly where the PG amount exceeds personal asset value); refinancing the PG into a personal payment plan; or — where total personal exposure exceeds personal asset value — personal bankruptcy or an Individual Voluntary Arrangement (IVA). Each PG has its own contract terms — some include reasonable demand provisions, some include limits on enforcement. Specialist legal review of each PG is typically warranted.

A director's loan account (DLA) records the running balance between the company and the director — amounts the company owes the director (DLA in credit) or amounts the director owes the company (DLA overdrawn). On insolvency, an overdrawn DLA is a liability owed by the director to the company — the liquidator must seek recovery as a company asset. Overdrawn DLAs commonly arise from drawings against anticipated dividends that are never declared, or unrecorded benefits in kind. Section 455 CTA 2010 also charges 33.75% (post-6 April 2022, rising to 35.75% from 6 April 2026) on overdrawn DLA balances unrepaid 9 months and 1 day after year-end — a separate corporation tax liability. DLA recovery and section 455 are common sources of director-personal exposure in OMB liquidations.

Often yes — to a meaningful degree. Earlier IP engagement materially reduces personal liability exposure relative to reactive responses to crystallised distress. Specific examples: stopping trading at the right time materially reduces wrongful trading exposure; structured engagement with HMRC reduces PLN risk; properly documented director decisions reduce misfeasance exposure; structured pre-procedure planning reduces preference and transaction at undervalue claims; honest engagement with the liquidator reduces disqualification risk. None of these are guarantees — but the difference in personal exposure between proactive and reactive engagement is typically substantial. The first call is precisely for assessing where you sit on this spectrum.

Costs depend materially on case complexity. Indicative ranges (UK SME, no exceptional complications): simple CVL of a small limited company — from £2,500 + VAT + disbursements ('simple' typically means under 10 creditors, no employees or director-only employee, no significant realisable assets, cooperative directors, no HMRC enforcement complications); typical SME CVL — £2,500–£6,000 + VAT + disbursements (most SME liquidations sit here, depending on creditor count, employee numbers, asset realisation work, and any investigation requirements); more complex CVL — £6,000+ + VAT + disbursements (substantial creditor counts, significant assets to realise, employee TUPE / RPS work, contested books and records, or investigation issues); simple MVL of a solvent company — from £2,000 + VAT + disbursements (single class of shares, distributable surplus typically below £500,000, clean tax position, cooperative members); typical MVL — £2,000–£5,000 + VAT + disbursements; administration with pre-pack sale — from £15,000 + VAT + disbursements (substantive value-preservation work including SIP 16 valuation, marketing process, and Pre-Pack Pool / qualifying evaluator engagement under the Connected Persons Regulations 2021); administration without pre-pack — £20,000–£60,000+ + VAT + disbursements depending on complexity, duration, and creditor coordination requirements; Company Voluntary Arrangement — £15,000–£50,000+ + VAT + disbursements depending on duration (typically 3–5 years), creditor coordination complexity, and supervisor work over the implementation period. These are indicative ranges only — your specific position requires assessment, and not every case fits the simple-case profile. Fees in formal procedures are typically funded from realisations rather than from the directors directly. We will provide a clear indicative fee in the first call once we understand your specific position, and the engagement letter at appointment confirms the fee in line with Statement of Insolvency Practice 9 (SIP 9) standards. There is no charge for the initial fee discussion.

CVL typically takes 6–18 months from appointment to final distribution and dissolution, depending on asset realisation complexity and creditor claim quantification. MVL typically takes 6–12 months. Compulsory liquidation typically takes 12–24 months given the higher procedural formality. Administration is typically 3–12 months. Pre-pack administration completes the sale immediately on appointment but the residual administration runs 3–12 months thereafter. CVA implementation typically runs 3–5 years. These are indicative ranges — simple cases complete faster, complex cases take longer.

Depends on procedural choice. Administration with pre-pack going-concern sale: employees transfer to the buyer under TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) with continuity of employment. Administration without sale or CVL: employees are typically made redundant by the office holder with statutory redundancy payments funded by the Redundancy Payments Service (RPS) up to statutory caps. Collective consultation under TULRCA applies where 20+ redundancies are anticipated within a 90-day period. Holiday pay, notice pay, and arrears of wages claims are addressed through the procedural framework with priority creditor status up to statutory caps. Employees are typically among the most carefully managed stakeholder groups in any insolvency procedure.

Customers: in administration with going-concern sale, customers typically transition to the buyer with service continuity — with limited disruption. In administration without sale or in CVL, customer contracts may be terminated by the office holder or honoured for a defined wind-down period. Suppliers: existing supplier debts at the procedural date rank as unsecured creditor claims and are typically not paid in full. The office holder may continue trading with suppliers post-appointment for ongoing service — either on continuation of existing terms or on new terms reflecting the procedural status. Critical suppliers (utilities, IT, payment processing) are typically priority engagement to preserve operational capability through the procedural period.

Creditor outcome is the proportion of the creditor's claim that is paid (in pence per £). The calculation depends on: total realisable asset value; procedural costs; secured creditor recoveries first (fixed-charge realisations to the secured creditor); preferential creditor recoveries next (employee priority claims, HMRC secondary preference for VAT/PAYE income tax/employee NIC/CIS/student loan); floating-charge holder recoveries (subject to prescribed part deduction); then unsecured creditor distribution from any remaining assets. In many SME insolvencies, unsecured creditors receive 0p in £ — the realisable assets are exhausted before reaching unsecured creditor tier. The IP must produce a Statement of Affairs showing estimated outcomes at the procedural commencement, and update creditors throughout.

The Statement of Affairs is a formal statement of the company's assets and liabilities at the procedural commencement, sworn by the directors. It is required in CVL (laid before creditors as part of the section 100 decision procedure — by deemed consent or virtual meeting under the Insolvency (England and Wales) Rules 2016; the old s98 physical creditors' meeting was abolished from 6 April 2017), in administration (filed with the court / Companies House), and in compulsory liquidation (filed at the Official Receiver's request). The IP supports the directors in preparing the Statement of Affairs but the directors swear to its accuracy. Failure to provide accurate information or false statements can result in personal liability and potential criminal offences under the Insolvency Act 1986. Honest, accurate disclosure is essential — the IP can guide on framing but cannot fabricate or omit material matters.

Generally yes, but with restrictions. Personal eligibility to be a director continues unaffected unless you are subject to a disqualification order under CDDA 1986 or equivalent restriction. However: section 216 IA 1986 prohibits the use of the same or similar company name (the 'prohibited name') for 5 years after liquidation, except under defined permissions. Many directors of liquidated companies start new businesses or take up directorships in other companies without restriction. Where disqualification proceedings have been brought, the disqualification period (typically 2–15 years) prevents directorship and certain other activities. Following the procedural conclusion, future fundraising relationships, business banking, and supplier credit may be affected by the prior insolvency in soft ways — which honest engagement and proper procedural execution can largely mitigate.