How much does an insolvency practitioner cost?
The cost of an insolvency practitioner depends on the type of procedure set to be carried out for the company or individual.
What service do I need and how much does it cost?
An insolvency practitioner is able to carry out a range of services and each one has a different payment structure. How much an insolvency practitioner costs will be very much dependent on which service you require. Some services will have a set fee, whilst others will have time costs or monthly payments. In some cases, there may be a combination of both.
How much does an insolvent Creditors Voluntary Liquidation (CVL) liquidation cost?
A CVL is a process that formally closes an insolvent company.
The costs incurred in the process of a creditors voluntary liquidation depends on but are not restricted to:
- The nature and size of the company in question
- The level of its debt and the quantity/value of its assets
- Time spent collecting debts, including those with directors
- Dealing with staff redundancies
If you are considering placing your company into a creditor’s voluntary liquidation, we can provide a free consultation to help you explore your options and the cost involved.
Find out more about our CVL costingHow much does a solvent Members Voluntary Liquidation (MVL) cost?
An MVL is the formal closure of a solvent company in a tax-efficient manner.
We have a tiered approach to help you understand the cost of an MVL.
- £995 + VAT + expenses – Simple MVL with in specie distribution
This option is for straightforward companies where there are no other matters to be dealt with as part of the liquidation. The company’s remaining value is held as cash at bank or a director’s loan account balance and can be distributed in specie. An in specie distribution can allow company funds to be distributed on day one of the liquidation, subject to the company meeting the required criteria. - £1,995 + VAT + expenses – Simple MVL with physical cash distribution
This option is for straightforward companies where there are no other matters to be dealt with as part of the liquidation. The liquidator will receive the company’s cash into the liquidation and physically distribute it to shareholders. The company funds will be distributed to shareholders in line with their shareholdings once the cash has been received into the liquidation. - £2,500 + VAT + expenses – MVL with HMRC tax or VAT refund claims
This option is for otherwise straightforward companies where corporation tax or VAT refunds need to be claimed from HMRC as part of the liquidation. This may be suitable whether the company’s existing funds are distributed in specie or by physical cash distribution.
This may apply where the company has:- The company is due a corporation tax refund
- The company is due a VAT refund
- The refund needs to be received into the liquidation and distributed to shareholders
This tier is designed for MVLs where the main additional work is claiming corporation tax or VAT refunds from HMRC.
- Bespoke fee – Complex MVL
Some MVLs need a bespoke quote because of the nature of the company and its position.
This may apply where the company has:- Property, shares, investments or other assets
- Assets that need to be sold or realised
- Section 455 tax refunds
- HMRC enquiries or investigations
- Outstanding or disputed creditor claims
- Active pension schemes
- More complex shareholder or distribution requirements
- Solvent restructuring requirements, including Section 110 reorganisations
A bespoke fee will be confirmed once we understand the company’s position and the work required.
Shareholder note: Where there are more than three shareholders to receive a distribution, an additional £100 + VAT per additional shareholder is added to the liquidators’ fee.
All tiers include the option for an in-specie distribution of company funds (a potential “day-1” distribution), subject to a final corporation tax return being provided.
Find out more about our MVL costingHow much does an administration cost?
An administration is the managed closure of a company to maximise the return to creditors. It provides the insolvency practitioner sufficient time to formulate a plan, outlining how to restructure or sell the company and its assets.
There are no fixed costs and the insolvency practitioners’ fees will most likely depend on the amount of time spent on the job. During an administration, the insolvency practitioner will see out any remaining work left within the business to maximise the return to creditors, as well as realising assets. So, the cost will depend on the amount of work for the IP to do.
How much does a CVA cost?
Company Voluntary Arrangement (CVA) is a process whereby insolvent companies can set up a formal debt repayment arrangement with creditors.
While there is no fixed cost for a Company Voluntary Arrangement, appropriate fees depend on the individual circumstances surrounding the company. These may include the number of creditors, level of debt, and nature of the business and its assets.
Find out more about our CVA costingHow much does an IVA cost?
An individual voluntary arrangement is for individuals and sole traders, to allow them to group all of their unsecured debts into one affordable monthly repayment.
An IVA has no fixed costs, and how much you’ll pay is decided on a case-by-case basis. IVA fees are ususally divided into three categories: Nominee fees, Supervisor fees, and expenses. Each covers different types of fees, associated with the cost of the IVA application, its implementation, and maintenance.
How we can help
Each one of the procedures above, must be carried out by a licensed insolvency practice such as ourselves. We are qualified to carry out all of the above procedures and can help walk you through all of the processes for our way of costing. If you’re looking for financial advice and would like a quote, then we provide free confidential advice.
- Speak with our initial advisers via phone or online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth.
- During the consultation, we will advise if an insolvency procedure is the most appropriate route forward, or what alternative options are available.
- After your consultation, if there is an appropriate route forward, we will issue the relevant documentation for you to formally engage us.
In summary
Generally, there are no set costs for an insolvency practitioner, it depends on the type of job, as well as the complexity and size of the job in question. Each procedure mentioned above must be carried out by a licensed insolvency practitioner and they will always work to provide the best return for creditors and the company directors.
Case Studies
Derwent Castings Limited
Kelly Burton • Metals • Creditors Voluntary Liquidation (CVL)
Unsecured creditors owed money by a Derbyshire manufacturing company which went into liquidation are to receive a higher than the expected dividend of 60p in the pound.
A total in excess of £128,000 is due to be distributed to unsecured creditors of Whatstandwell-based Derwent Castings Limited, whose claims totalled over £192,000.
The company, whose roots date back to the 1940s, had traded profitably for a number of years but in late 2013 / early 2014 saw the cancellation of its largest sales contract which represented 70 per cent of its turnover.
Bosses at the company, which employed 16 staff including three directors, struggled to attract replacement business and had to drop prices. Further business was lost as a result of foreign competition.
Sheffield’s insolvency specialist Wilson Field was called in as liquidator and worked with the creditors’ committee of Derwent Castings Limited to secure the positive dividend.
Andy Wood, associate director and insolvency practitioner at Wilson Field said:
“Dividends for insolvent companies are generally low, or nothing, for a variety of reasons – cost of staff redundancies, difficulty collecting outstanding invoices, selling assets in a forced sale situation, selling specialist assets which have limited appeal to purchasers, deteriorating or perishable assets, as well as other costs involved.
“However, thanks to a very positive relationship with the creditors committee, I am delighted to return a healthy dividend to the unsecured creditors in the region of 60p in the pound.
“The supply chain is often greatly affected by a liquidation and in this case we have been able to help creditors.”
Derwent Castings Limited was incorporated in August 2002 and specialised in iron casting from the five-acre Derwent Foundry site at Whatstandwell near Matlock.
However, the iron founding operation at Derwent Foundry was first introduced back in 1946 by Wragg & Hawksley which produced cast iron pipes for the water industry.
In 1950 the foundry was acquired by WH Davis & Sons Ltd to supply castings for their railway wagon building business. Following a management buy out in 1984, the company was renamed Derwent Foundry Ltd and following its closure in July 2002, was bought by its present owners and renamed Derwent Castings Ltd.
Amongst jobs carried out on site were moulding using loose pattern and modern air setting (boxless) sand systems; metals work using the latest in electric induction melting producing a wide range of grey, SG and alloy irons; an independent Namas approved test laboratory, finishing, pattern making and machining facilities.
Designer Recliners Limited
Kelly Burton • Manufacturing • Administration, Company Voluntary Arrangement (CVA)
A Sheffield furniture manufacturer and upholster has relaunched offering a smaller, more specialised range of products.
Anico Interiors Limited, which included reclining chairs for the elderly, had suffered cash flow problems and issues with profitability.
Designer Recliners Limited, managed by director Nick Wall, has purchased the assets and business of Anico saving all 11 jobs.
Andy Wood and Robert Dymond from Sheffield business turnaround experts Wilson Field were appointed joint liquidators on 8 June and advised on the sale of the 14-year-old company, based on Orgreave Crescent at Orgreave Industrial Estate, as a going concern.
Andy Wood, associate director and insolvency practitioner at Wilson Field said:
“Historically, the company offered a wide range of products but has now streamlined its offer to customers and cut out some unprofitable lines, as well as re-vamped its web site.
“Directors took advice from Wilson Field with the business sold to new company Designer Recliners Limited as a going concern, safeguarding all 11 employees’ jobs. The new company will offer the same service and standards under the same management team but focus on a smaller range of specialised products.”
The company employs skilled staff including upholsterers, seamstresses and cutters and was set up in 2002 by Nick Wall.
Silcox Coach Company
Kelly Burton • Automotive • Company Voluntary Arrangement (CVA)
Pembrokeshire-based Silcox Coach Company, which operates school transport as well as local bus services, has been placed into administration today.
Despite attempts by administrators from Sheffield-based Wilson Field to secure a buyer with various interested parties, the 134-year-old company, which operated a fleet of 65 coaches and buses from its base in Pembroke Dock, has now ceased trading.
Insolvency practitioners Kelly Burton and Joanne Wright from Wilson Field Limited were appointed by shareholders after the company experienced financial difficulties and as a result all 92 staff jobs have been made redundant.
However, in the region of 50 staff have been re-employed by Edwards Coaches of Pontypridd who have been granted the local authority contracts previously operated by Silcox.
Kelly Burton, director and insolvency practitioner at Wilson Field said:
“Silcox Coaches was a fourth generation bus and coach operator and over the years provided various forms of transport services latterly focussing local authority community bus routes, school services, coach hire and coaching holidays.
“The company had an excellent reputation within the industry, the local community and its clients. Initially there were a number of parties interested in buying the business and assets and we had hoped to save all the jobs of the loyal workforce. Sadly, despite our best efforts none of these came to fruition. On the positive side, Edwards Coaches of Pontypridd have re-employed approximately 50 of those staff.”
As well as office accommodation in Pembroke Dock, Silcox also occupied a small travel office in Tenby and a large bus and coach compound near the offices in Pembroke Dock.
Edwards Coaches is the largest family owned coach company in Wales employing over 500 staff and operating 260 vehicles. It currently operates National Express coaches from Haverfordwest departing daily to Cardiff, Heathrow, Gatwick London and various other destinations plus transportation for over 8000 students to school or college each day from bus depots all over South Wales.
It also operates coach holidays for 80,000 passengers a year across the UK and Europe and operates The Edwards’ Red Dragon coach which is the official carrier of the Wales Rugby Team.
Travellers who have booked and pre-paid for a holiday with Silcox may be entitled to a refund and should contact either Bonded Coach Holidays (BCH) e-mail: bch@cpt-uk.org or The Confederation of Passenger Holidays UK (CPT) Tel: 020 7240 3131.
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