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 cost a CVL depends on, but is 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.

How 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.

• £1,995 + 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.
• £2,995 + 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.
• £3,500 + 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.

How 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. 

How 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 usually 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.

1. 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.
2. During the consultation, we will advise if an insolvency procedure is the most appropriate route forward, or what alternative options are available.
3. 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

K2 Technologies Ltd and K2 Thermal Imaging Ltd

Kelly Burton • Service Agency • Administration

Wilson Field has helped secure the sale of two related North East businesses, which developed and manufactured thermal imaging equipment, as a going concern to Cenergem Limited backed by a group of local investors not associated with the current management.

Kelly Burton and Joanne Wright from Sheffield-based insolvency specialists Wilson Field were appointed joint administrators of Darlington-based K2 Technologies Ltd and K2 Thermal Imaging Ltd on 25 July 2016.

The two companies had experienced cash flow problems following a sharp decline in the demand for their products due to increased global competition in the market over the last 18 months.

The sale, which resulted in six of the current eight jobs being saved, was achieved by Wilson Field, working alongside valuers and asset management consultants Charterfields, who handled a number of enquiries and Mark Wilkinson, insolvency partner at Shulmans Solicitors in Leeds.

Kelly Burton, director and licensed insolvency practitioner at Wilson Field said:

“During the past 12 to 18 months K2 had begun to experience increased competition in the market. Competitors had started to manufacture and sell similar products at a lower price, meaning the company had seen a sharp decline in the demand of products and a resultant shortage of cash flow.

“Our job was to realise a sale of K2 as a going concern to achieve the best return for the company’s creditors. There was significant interest from a number of parties. The resultant sale has also saved six of the eight jobs.”

K2 Thermal Imaging Ltd and its predecessors were involved in the development of three products establishing the company as a pioneer in thermal imaging.

The company designed and engineered three main product ranges for extensive use in the marine, firefighting and industrial sectors, allowing operators to enter smoke-filled environments to detect and rescue people with a hands-free application, therefore improving success rates in recovery.

Oldham Precision

Kelly Burton • Construction & Engineering • Administration

Machining engineers Oldham Precision, has been bought out of administration, saving all 12 jobs.

The company’s principal activity was the subcontract manufacture of large volume batch precision machined components for clients across a wide range of industries including aerospace, paper converting, printing, coatings, electronics and valve construction.

Administrators Kelly Burton and Lisa Hogg from Sheffield business turnaround experts Wilson Field were appointed joint administrators on 17 January after the company suffered cash flow problems.

Originally established in 1982, the company, based at Red Rose Business Park on Shaw Rd in Royton, offered subcontract engineering including CNC milling, grinding and turning.

After advice from Wilson Field, the business was sold to the existing management team as a going concern, saving all 12 employees’ jobs.

Kelly Burton, director in the Leeds office at Wilson Field said:

“Following discussions with the director, the business was sold as a going concern, safeguarding all 12 employees’ jobs and offering a better return for the company’s creditors than alternative options.

“The new company will be under the same management offering the same standards of service to its customers.”

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-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.

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