Frequently Asked Questions

An administration is a UK insolvency procedure which is designed to protect the entity while the administrators try to sell the business and/or its assets.

The administration process is set-out in Schedule B1 to the Insolvency Act 1986. This defines the administrators’ powers and duties and also sets out the purposes of an administration as follows:

• the primary aim of an administration is to rescue the entity so that it can continue to trade and operate sustainably in the future; failing this,
• the secondary aim is to sell the business and assets of the entity providing creditors with a better outcome than if the entity had gone into liquidation; failing this,
• if neither of these objectives can be achieved, administration may be used as a way of realising assets in order to pay a dividend to secured creditors and/or preferential creditors.

An administration provides a moratorium preventing any legal action from being taken against the entity without specific permission from the administrators or the Court, in order to ensure that the entity’s assets can be realised for the benefit of creditors as a whole, rather than specific individual creditors.

The administrators are licensed Insolvency Practitioners, who are authorised to act by a Recognised Professional Body. The administrators’ details can be found on correspondence, reports, at Companies House and on this website.

The administrators are often referred to as the Joint Administrators, as in most cases there will be more than one administrator appointed over an entity. The Joint Administrators act as agents of the entity and without personal liability.

The administrators take over the management of the business with a view to achieving the purpose of the administration (set out in the proposals). In addition, the administrators have a number of statutory duties set out in the Insolvency Act 1986 and The Insolvency (Scotland) (Company Voluntary Arrangements and Administration) Rules 2018.

• deciding on the best strategy for the administration to achieve the best outcome reasonably possible in the circumstances;
• identifying and securing the assets of the entity;
• selling or disposing of the assets;
• securing and retaining the books and records of the entity;
• collecting debts due to the entity;
• notifying prescribed parties of the administration;
• dealing with creditor queries and claims;
• dealing with the entity’s employees;
• reporting on the conduct of the directors; and
• reporting to creditors.

When an entity goes into administration, the costs of the administration proceedings, including the administrators’ remuneration and disbursements, are paid from the assets of the entity.

Administrators’ remuneration can be on the basis of time costs (i.e. time properly incurred by the administrator and his staff in attending to matters arising in the administration), a fixed fee, a percentage of the value of assets realised, or a combination of these. Please see the creditors' guide to administrators' fees for further information.

• the Creditors’ Committee;
• the unsecured creditors (via a creditors’ decision procedure);
• secured creditors;
• preferential creditors; and/or
• the Court.

An administration initially lasts for a maximum of 12 months. However, if the administrators believe that it is in the best interests of creditors to continue the administration (for example if assets of value are yet to be realised) then it can be extended beyond this 12 month period.

Where an extension is relevant to the case, further details will be provided in the progress reports to creditors.

Administrations can end through a number of different routes. The option chosen will depend on the circumstances of the case, and the proposed exit route can be found in the proposals.

Common exit routes include:

• dissolution (striking-off) of the entity; or
• Creditors’ Voluntary Liquidation (CVL).

The directors’ powers cease on the appointment of administrators; however, if the administrators believe that it will benefit the administration, the directors may be retained as employees to provide assistance.

If a director has given a personal guarantee to any creditors, he/she is likely to be called upon to pay them.

If a director is also an employee of the company (as is often the case), he/she will be subject to the same process and claims as employees generally.

The directors of an insolvent entity must submit a Statement of Affairs to the administrators. Where the Statement of Affairs has been provided to the administrators prior to the publishing of the proposals, it will be included as an Appendix within the proposals. Where the Statement of Affairs has not been provided, an Estimated Financial Position produced by the administrators will be included instead.

The directors’ Statement of Affairs is a public document and is filed at Companies House.

As part of the administrators’ statutory duties, a report on the conduct of the directors must be submitted to the Insolvency Service, part of the UK Government. This report is confidential and its contents cannot be disclosed by the administrators. Following the administrators’ report, the Insolvency Service will determine whether any action should be taken against the directors, for example, seeking to disqualify a director as a result of his or her conduct.

If a creditor wishes to bring any matters to the attention of the administrators in relation to the conduct of the directors, they can do so in writing. The relevant contact details are provided within the proposals.

If a creditor is not happy with how the administration is being carried out, this should be raised with the administrators or their staff in the first instance.

If the creditor is still not satisfied, a complaint can be made to the Recognised Professional Bodies of the administrators, via the Complaints Gateway managed by the Insolvency Service. Details of the administrators’ Recognised Professional Bodies can be found on correspondence, reports, Companies House and on this website.

A creditor is anyone who can demonstrate that they are owed money, goods or services by an entity.

There are various types of creditor. The main types are listed below:

• A secured creditor (often a bank) has a charge, registered at Companies House, over some (or all) of the assets of the entity.
• Creditors wishing to claim any form of security should immediately notify the administrators in writing and provide appropriate supporting security documentation.

• A fixed charge creditor is a secured creditor which has a charge allowing it to exercise control over specific assets of the entity (specific land, buildings and associated rights).

• A floating charge creditor is a secured creditor which has a charge over some or all of the assets of the entity but does not have control over each asset; allowing the entity to deal with them freely.

A preferential creditor is one or more of the following:

• an employee who is owed arrears of wages up to a statutory maximum (any balance owed above this maximum is an unsecured claim);
• an employee with outstanding holiday pay; or
• an employee who is owed certain pension contributions;
• certain other amounts listed in the Insolvency Act 1986; and
• HMRC rank preferentially for certain taxes only, including for VAT, PAYE, CIS tax and employees’ National Insurance Contributions (‘NIC’) for insolvency appointments made on or after 1 December 2020.’ However, this is secondary to employee preferential creditors. This essentially means that HMRC will not be repaid any of their secondary preferential debt until all employee preferential claims have been paid in full. HMRC remain an unsecured creditor for any other type of tax, for example, corporation tax. Certain claims form the Financial Services Compensation Scheme (‘FSCF’) also rank alongside HMRC as secondary preferential creditors.

Preferential creditors have no security over any assets of the entity but are paid in priority to floating charge creditors and unsecured creditors.

• Unsecured creditors have no security over any of the assets of the entity. They will typically include trade suppliers, landlords, utility providers, customers and any employee claims which do not rank preferentially.

The amount of money creditors receive will vary depending on the circumstances of the case, and where they rank in the order of payments.

The Insolvency Act 1986 sets out the order in which the administrators must distribute the assets of the entity:

Please note that in some cases there will not be sufficient funds to allow payments to be made to some (or all) categories of creditors.

In cases where there are sufficient funds to enable payment to unsecured creditors, it is likely that unsecured creditors will not be repaid in full (due to the insolvency of the entity). Instead, unsecured creditors receive a proportion of the amount they are owed. This is referred to as a dividend and is expressed as the amount of pence received for each pound of their debt. All unsecured creditors rank equally for unsecured dividends.

The administrators’ proposals and progress reports set out the dividend prospects for each class of creditor.

• realise the assets of the entity;
• settle or accrue for the expenses of the administration; and
• agree the claims of the classes of creditors to receive the dividend.

Any or all of the above steps may include factors which are uncertain, complex or time consuming to resolve; however, the administrators will provide creditors with timescales and an estimate of amounts to be distributed as soon as they are able to do so.

Administrators are not empowered to pay dividends to unsecured creditors over and above the Prescribed Part. However, they can apply to Court for the power to do so.

The Prescribed Part is an amount of money that must be set aside to be made available to the unsecured creditors in priority to the floating charge holder, where that charge was created after 15 September 2003. The maximum Prescribed Part that can be made available in £600,000.

If there are funds to distribute to unsecured creditors over and above the Prescribed Part, it is usual for the entity to be placed into liquidation in order for the funds to be distributed.

The administrators’ proposals and progress reports set out dividend prospects along with the expected amount and timing of dividends (where applicable).

A statement of claim form can be found on this website.

Guidance on how to complete a statement of claim form can be found here.

Within eight weeks of the appointment of administrators, creditors will receive notification that the administrators’ proposals are available to view online. These proposals will set out, amongst other things, the known assets and liabilities of the entity, the administrators’ strategy for achieving the objective of the administration and details of the progress made to date.

In addition, progress reports are made available for all creditors within six weeks of every six-month period that elapses in an administration. Progress reports provide an update on the administration including any changes to the strategy and the estimated outcome to creditors. A final progress report will be available when the administration is ready for closure.

These progress reports will be available to view online.

A paper copy of the proposals or progress reports can be requested from the administrators and will be sent out free of charge. Details of who to contact are available on this website.

Depending on the circumstances of the case, the administrators may initiate a decision procedure to seek approval of their proposals at the same time as they notify creditors that the proposals are available to view online, being within eight weeks of their appointment. At this time, they will confirm whether they intend to opt for deemed approval of the proposals, or to seek approval via deemed consent or a decision procedure.

Where a creditors’ decision procedure is convened to seek approval of the administrators’ proposals, further decisions to be considered at this time may include approval for the basis and amount of remuneration and outlays, payment of any unpaid pre-administration costs as an expense of the administration and discharge from liability.

Creditors will also be invited to consider whether a Creditors’ Committee should be established, provided sufficient creditors are willing to be members of the Committee.

These, together with any other decisions to be voted on, will be set out in the formal notice sent to creditors. Notice of the decision procedure will be given at least two weeks before the decision date.

In addition, the administrators can initiate a creditors’ decision procedure at any point during the course of the administration for the purpose of ascertaining creditors’ wishes regarding the administration.

Creditors can object to a deemed consent or deemed approval procedure if their claim(s) total at least 10% of the total value of the creditor claims in the administration. The administrators would then have to convene another decision procedure to obtain the creditors’ decision(s).

The Administrators will summon a physical meeting in place of another decision procedure (1) if asked to do so by (a) creditors whose debts amount to at least 10% of the total debts of the Company, or (b) 10% in number of creditors, or (c) 10 creditors. Requests for such a physical meeting must be made within five business days of the date on which the notice of the decision procedure was delivered.

Physical meeting request forms will be made available on the Portal when the Administrators notify creditors that they are seeking a decision

A creditor has a right to request a decision. The request must include:

• A statement of the purpose of the proposed decision; and
• Either a statement of the requesting creditor’s claim, with (i) a list of the creditors concurring with the request, showing the amounts of their respective debts in the administration and (ii) written confirmation of their concurrence from each concurring creditor; or
• A statement of the requesting creditor’s debt and that alone is sufficient without the concurrence of other creditors.

The expenses of a requisitioned decision must (subject to limited exceptions) be paid by the requesting creditor. The requesting creditor is required to deposit security for such expenses with us.

Should a physical meeting be requisitioned, decisions to be voted on at the meeting will be as set out in the notice from the administrators seeking a decision of creditors. As above, such decisions may include approval of the administrators’ proposals, whether or not to form a Creditors’ Committee, approval for the basis and amount of remuneration and outlays, payment of any unpaid pre-administration costs as an expense of the administration, discharge from liability and approval for an extension of the administration.

Where a creditors’ meeting is requisitioned, all creditors will be notified of the date and venue should they wish to attend. Meetings are generally of a formal nature and there is no requirement for a creditor to attend in person unless they wish to do so; they can instead submit a proxy form.

Any creditor of the entity is entitled to vote at a creditors’ meeting.

Any creditor whose debt is treated as a small debt (i.e. £1,000 or less) must still deliver a statement of claim and documentary evidence of their claim if they wish to vote. Any creditor who has opted out from receiving notices may still vote, provided they provide a statement of claim and documentary evidence.

If the creditor is an entity, an authorised representative must submit:

a proxy form in order to nominate an individual to represent the entity at a meeting; and
a valid statement of claim form, with documentary evidence of the claim, must accompany the proxy form.

If the creditor is an individual or partnership, they must submit:

a valid statement of claim form with documentary evidence of their claim; and
only if they wish to nominate another individual to represent them at the meeting, a proxy form.

A secured creditor is entitled to vote only in respect of the balance of their debt (if any) after deducting the value of their security, as estimated by them.

Statement of claim forms and proxy forms can be found on this website.

If a creditor wishes to vote but cannot attend the meeting, then it is possible to vote at the meeting by submitting a proxy form.

Any creditor whose debt is treated as a small debt (i.e. £1,000 or less) must still deliver a statement of claim with documentary evidence if they wish to vote. Any creditor who has opted out from receiving notices may still vote, provided they provide a statement of claim form and documentary evidence.

A creditor may use the proxy form to nominate either:

an individual to represent them at the meeting; or
the Chair of the meeting (usually one of the administrators) to cast the vote on their behalf.

The proxy form is a formal instruction to an individual to vote on the creditor’s behalf. The proxy can be used to instruct the individual to vote in a specific manner (i.e. for or against) or allow them to use their discretion at the meeting.

Guidance on how to complete a proxy form can be found here.

A Creditors’ Committee represents the interests of the creditors as a whole, rather than the interests of certain parties or individuals.

The statutory function of a Creditors’ Committee is to help the administrators to discharge their responsibilities. There is no requirement to form a Creditors’ Committee and it is up to creditors whether they wish to do so.

If a Creditors’ Committee is formed it is for that body, for instance, to approve:

• the basis and amount of the administrators’ remuneration and outlays;
• the drawing of certain disbursements;
• the payment of unpaid pre-administration costs; and
• discharge from liability in respect of any actions as administrators

Members of the Creditors’ Committee are not remunerated for their time. Other than receiving travel expenses for attending Committee meetings, they receive no payment from the company.

A Creditors’ Committee can be formed as a result of a decision procedure at any time during the course of an administration. Creditors will be invited to consider whether a Creditors’ Committee should be established, provided sufficient creditors are willing to be members of the committee. The minimum number of committee members is three and the maximum is five.

In order to enable creditors to make an informed decision, a guidance note on the formation of a Creditors’ Committee and the role of a committee member has been published and can be found at the following link:https://www.r3.org.uk/media/documents/publications/professional/R3-Guide-to-Creditors-Committees.pdf.

A creditor may at any time elect to opt-out of receiving further documents relating to the insolvency proceedings. Importantly this will not affect the creditors’ entitlement to receive dividends, where funds are available to distribute.

Where a creditor has elected to opt-out, the opt-out does not apply, and documentation will still be sent out, in relation to:

1. Any notices which the Insolvency Act 1986 requires to be delivered to all creditors;
2. A notice of change in the officeholder or any changes to the contact details for the office-holder;
3. Any notices of distributions, intended distributions and notices required by Court order; or
4. Any document accompanying any of the notices within (1) to (3) above.

Yes. The administrators’ Proposals and Progress Reports will be posted onto the Insolvency Portal and any creditor will still be able to access these at any time by using the link provided in the initial correspondence from the administrators.

Creditors will also be able to access any other documents uploaded to the Portal.

No. Opting-out does not affect a creditor’s entitlement to receive dividends should any be paid to creditors.

Opting-out also does not affect a creditor’s right to vote in a decision procedure or participate in a deemed consent procedure, although a creditor will not receive notice of it.

If a creditor wishes to opt-out, they must do so by returning a signed and dated opting-out notice to the administrators.

The administrators will, in their first communication with the creditors, advise them of their ability to elect to opt-out and will provide a notice setting out the legislative requirements.

An opt-out notice is also available on the website for completion if required.

The opt-out starts as soon as a signed notice has been received by the administrators.

A creditor may revoke their election to opt-out at any time by completing a further notice in writing. An opt-back notice is located on the website for completion if required.

A creditor who opts out will be treated as having opted-out in respect of any consecutive insolvency proceedings in respect of the company i.e. the subsequent liquidation where the company moves from administration to liquidation.

A creditor will remain an opted-out creditor for the duration of these and any other subsequent proceedings unless the creditor revokes their election to opt-out as above.

A pre-pack is where a sale of a business is negotiated prior to the appointment of administrators and is completed immediately on or shortly after the day that the administrators are appointed. It allows the administrators to sell a business quickly and confidentially in order to preserve its value for the benefit of creditors.

A pre-pack may be appropriate to secure the best outcome for creditors, for example, where:

• the impact of the administration would have a significantly detrimental effect on the value of the entity’s assets such as where there is perishable stock; or
• the administrators are unable to trade the business owing to significant risks such as regulatory/legal issues or where there is insufficient funding to trade.

It is the nature of a pre-pack that the sale of the business or assets is not in the public domain before completion.

Where a pre-pack has been completed, in accordance with Statement of Insolvency Practice (‘SIP’) 16, the administrators will provide creditors with details of how the pre-pack was conducted so that creditors can be satisfied that the administrators have acted with due regard for their interests.

For details of information which must be disclosed in accordance with SIP 16 in the case of a pre-pack please click here.

A liquidation is a UK insolvency procedure which is used to realise the assets of the entity and, where funds allow, make payments to creditors.

Whereas an administration can seek to rescue the entity, liquidation signifies the end of an entity’s existence. Once the assets have been realised the entity will typically be dissolved (or struck off) and will cease to exist.

Liquidation can be used as an exit route from an administration where there are funds available for unsecured creditors over and above the Prescribed Part, or an entity can enter liquidation directly if it is insolvent.

A common form of liquidation following an administration is a Creditors’ Voluntary Liquidation (CVL).

In the same way as administrators, liquidators are licensed Insolvency Practitioners who are authorised to act by a Recognised Professional Body. The liquidators’ details can be found on correspondence, reports, at Companies House and on this website.

When a liquidation follows an administration (or another form of insolvency) often the only asset to distribute to creditors will be the cash held, although some unrealised assets may be passed from the administration for realisation in the liquidation.

If a dividend is to be paid, the liquidators will agree creditor claims in order to establish each creditors' share in the distribution. If there are a large number of creditors, or complex claims, this can be an involved process that can take some time.

Creditors can assist the liquidators to make this as efficient as possible by submitting their claim together with supporting documentary evidence, and responding to all correspondence promptly.

The liquidators in a CVL must provide a progress report to the creditors within six weeks of the anniversary of the liquidation.

Further progress reports will be sent covering each subsequent 12 month period until the final liquidation progress report is sent.

Where the liquidation lasts for less than one year, the first progress report will also be the final progress report.

A creditor is anyone who can demonstrate that they are owed money, goods or services by an entity.

There are various types of creditor. The main types are listed below:

• A secured creditor (often a bank) has a charge, registered at Companies House, over some (or all) of the assets of the entity.
• Creditors wishing to claim any form of security should immediately notify the administrators in writing and provide appropriate supporting security documentation.

• A fixed charge creditor is a secured creditor which has a charge allowing it to exercise control over specific assets of the entity (specific land, buildings and associated rights).

• A floating charge creditor is a secured creditor which has a charge over some or all of the assets of the entity but does not have control over each asset; allowing the entity to deal with them freely.

A preferential creditor is one or more of the following:

• an employee who is owed arrears of wages up to a statutory maximum (any balance owed above this maximum is an unsecured claim);
• an employee with outstanding holiday pay; or
• an employee who is owed certain pension contributions;
• certain other amounts listed in the Insolvency Act 1986; and
• HMRC rank preferentially for certain taxes only, including for VAT, PAYE, CIS tax and employees’ National Insurance Contributions (‘NIC’) for insolvency appointments made on or after 1 December 2020.’ However, this is secondary to employee preferential creditors. This essentially means that HMRC will not be repaid any of their secondary preferential debt until all employee preferential claims have been paid in full. HMRC remain an unsecured creditor for any other type of tax, for example, corporation tax. Certain claims form the Financial Services Compensation Scheme (‘FSCF’) also rank alongside HMRC as secondary preferential creditors.

Preferential creditors have no security over any assets of the entity but are paid in priority to floating charge creditors and unsecured creditors.

• Unsecured creditors have no security over any of the assets of the entity. They will typically include trade suppliers, landlords, utility providers, customers and any employee claims which do not rank preferentially.

The amount of money creditors receive will vary depending on the circumstances of the case, and where they rank in the order of payments.

The Insolvency Act 1986 sets out the order in which the administrators must distribute the assets of the entity:

Please note that receivers can only make distributions to secured and preferential creditors. Where there are sufficient funds available to make a distribution to unsecured creditors these funds will be passed to a liquidator (who will be another insolvency practitioner from a different firm) who will then agree the unsecured claims and make a distribution.

The amounts anticipated to be available for the various categories of creditors will be detailed in the receivers’ report. This report will be available to creditors within three months of receivers’ appointment.

A company voluntary arrangement or “CVA” is a UK insolvency procedure which is designed to allow a company to reach a compromise agreement with some or all of its creditors. A company in a voluntary arrangement can continue to trade and retains responsibility for the conduct of its trading.

The proposed compromise is normally put to creditors by the company’s directors but can also be made by an insolvency practitioner acting as administrator or liquidator of a company.

A CVA usually involves the compromise of some or all of a company’s creditors, although it cannot seek to alter the status of liabilities which insolvency legislation defines as preferential; see below for further information. In addition, a CVA cannot seek to deprive creditors who hold security over assets (in the form of a charge or mortgage) from enforcing their rights over those assets.

A company seeking to make a CVA proposal first has to engage one or more insolvency practitioners to act as nominees to the proposal.

The nominees are licensed Insolvency Practitioners, who are authorised to act by a Recognised Professional Body. Their details can be found on correspondence and reports on this website. The nominees are often referred to as the Joint Nominees, as in most cases there will be more than one nominee appointed.

The nominees’ role is to review the proposal and recommend whether or not it should be put to creditors for their consideration. The nominees will prepare a report on the CVA containing their recommendations, which is lodged in Court.

The nominees will normally be paid by the company. Details of payments made or proposed to be made to the nominees should be included in the CVA proposal or in the nominees’ report.

Assuming the nominees recommend that the company’s CVA proposal is put to creditors for their consideration, they will proceed to send a notice of a decision procedure to creditors, giving at least 14 clear days’ notice of the decision date. The creditors can vote whether to accept or reject the proposal and can also propose modifications to it.

Should the creditors wish, they can request the nominees to summon a physical creditors’ meeting rather than the decision procedure. Details of the procedure to requisition a physical meeting will be included with the notice sent to creditors.

The nominees will also call a meeting of shareholders, to be held not later than five business days after the creditors’ decision date. At the meeting the shareholders can vote whether to accept or reject the proposal.

The nominees will send notices in respect of the creditors’ decision procedure and the meeting of members, together with a copy of the CVA proposal and their report, to Court.

A majority in excess of 75% of total creditor votes cast, by value, must approve the proposal. In addition, a simple majority of total votes cast, by value, of creditors that are not connected to the company (for example, directors, and companies under common ownership) must also approve the proposal in order for it to come into effect.

A simple majority of total shareholder votes cast, by number of shares held, must approve the proposal in order for it to come into effect.

If the outcome of the creditors’ decision procedure and the shareholders’ meeting differ, the decision of the creditors’ decision procedure stands.

It is important to note that, if approved, dissenting and non-voting creditors are bound by the terms of the proposal.

As stated above, should the creditors wish, they can request the nominees to summon a physical creditors’ meeting rather than the decision procedure to consider the CVA proposal. Details of the procedure to requisition a physical meeting will be included with the notice sent to creditors.

To do this, the creditor (or creditors) making the request must have a claim (or claims) that total:

- at least 10% of the total value of the company’s creditors;
- at least 10% in number of the total number of creditors, or
- at least 10 creditors.

Such requests must be received either before, or within five business days of the notice of the decision procedure being delivered to creditors and include:

- a list of the creditors concurring with the request, showing the amounts of their respective debts;
- written confirmation of their agreement from each concurring creditor; and
- a statement of the purpose of the proposed meeting.

Should a physical meeting of creditors be requisitioned, any creditor of the entity is entitled to vote at the creditors’ meeting. Secured creditors are entitled to vote only in respect of the balance of their debt (if any) after deducting the value of their security, as estimated by them.

If the creditor is an entity, an authorised representative must submit:

• a proxy form in order to nominate a named individual to represent the entity at the meeting; and
• a valid statement of claim form with documentary evidence of the debt.

If the creditor is an individual or partnership, they must submit:

• a valid statement of claim form (together with documentary evidence); and
• only if they wish to nominate another named individual to represent them at the meeting, a proxy form.

Guidance on how to complete a proxy form can be found here.

A creditor or shareholder can challenge the approval of a CVA proposal on two grounds:

• That the proposal unfairly prejudices the interests of a creditor or shareholder; or

• That there has been a material irregularity in relation to the meetings.

Such an application must be lodged in Court no later than 28 days after the date on which the outcomes of the meeting have been filed in Court.

The directors will normally place the company into an alternative form of insolvency process such as administration or liquidation.

The nominees will become supervisors of the CVA. Their role is to ensure that the company carries out its obligations under the CVA proposal. This can often include receiving funds from the company or a third party to be used to make payments to creditors.

This will depend on what is contained in the CVA proposal. Most commonly, the proposal will state that the supervisors’ remuneration and disbursements are paid from the funds held within the CVA.

Supervisors’ remuneration is not defined in insolvency legislation but is usually based on time costs (i.e. time properly incurred by the supervisors and their staff in discharging their role as defined in the CVA proposal and complying with their statutory obligations) or a percentage of the value of assets realised. Please see the creditors' guide to insolvency practitioners’ fees in voluntary arrangements for further information.

The duration of a CVA is not determined by legislation but by the proposal itself. Typically it is not unusual for a CVA to remain in place for up to three years.

The supervisors must report on the progress of the CVA on an annual basis (within two months of each anniversary).

At the end of the CVA, the supervisors will certify that the CVA has been fully implemented. Within 28 days of the end of the CVA, the supervisors will distribute a final report to creditors and cease to act.

If a creditor is not happy with how the CVA is being carried out, this should be raised with the supervisors or their staff in the first instance.

If the creditor is still not satisfied, a complaint can be made to the Recognised Professional Bodies of the supervisors via the Complaints Gateway managed by the Insolvency Service. Details of the supervisors’ Recognised Professional Bodies can be found on correspondence, reports, at Companies House and on this website.

A creditor is anyone who can demonstrate that they are owed money, goods or services by an entity.

There are various types of creditor. The main types are listed below:

• Secured creditors (most commonly banks, finance creditors and other lenders) hold charges, registered at Companies House, over some (or all) of the assets of the relevant entity. The rights of a secured creditor over the charged assets cannot be altered by a CVA without the consent of that secured creditor.

• A fixed charge creditor is a secured creditor which has a charge allowing it to exercise control over specific assets of the entity (specific land, buildings and associated rights).

• A floating charge creditor is a secured creditor which has a charge over some or all of the assets of the entity but does not have control over each asset; allowing the entity to deal with them freely.

A preferential creditor is one or more of the following:

• An employee who is owed arrears of wages up to a statutory maximum (any balance owed above this maximum is an unsecured claim);

• An employee with outstanding holiday pay; or

• An employee who is owed certain pension contributions;

• Certain other amounts listed in the Insolvency Act 1986; and
• HMRC rank preferentially for certain taxes only, including for VAT, PAYE, CIS tax and employees’ National Insurance Contributions (‘NIC’) for insolvency appointments made on or after 1 December 2020.’ However, this is secondary to employee preferential creditors. This essentially means that HMRC will not be repaid any of their secondary preferential debt until all employee preferential claims have been paid in full. HMRC remain an unsecured creditor for any other type of tax, for example, corporation tax. Certain claims form the Financial Services Compensation Scheme (‘FSCF’) also rank alongside HMRC as secondary preferential creditors.

Preferential creditors have no security over any assets of the entity but are paid in priority to floating charge creditors and unsecured creditors. A CVA cannot seek to alter the status of preferential liabilities.

• Unsecured creditors have no security over any of the assets of the entity. They will typically include trade suppliers, landlords, utility providers, customers and any employee claims which do not rank preferentially.

The amount of money creditors receive will vary depending on how the CVA proposes to address the claims of creditors.

Unlike other insolvency processes, it is possible to treat creditors differently in a CVA. It is possible therefore that a CVA will state that certain creditors (for example, ordinary suppliers) continue to be paid in full in the ordinary course of business. Alternatively, a CVA may propose that creditors receive a percentage of their debts funded either from a one-off lump sum payment into the CVA or by contributions over a period of time (commonly three years).

A CVA can also propose that future liabilities are compromised. For example, payments due under an ongoing contract for goods or services (such as a property lease) can be reduced or even terminated.

However, no creditor should be offered an outcome in a CVA which is worse than it would be if the company opted instead to appoint administrators or liquidators. Furthermore, secured creditors (see above for definition of a secured creditor) cannot be compelled to give up their enforcement rights in respect of company assets which form part of their security. Creditors whose claims are given preferential status under the law (see above for definition of a preferential creditor) cannot be compelled to waive that preferential status.

The CVA proposals and supervisors’ subsequent progress reports set out the dividend prospects for creditors where relevant.

If there is going to be a dividend, an estimate of the timing of such a dividend should be contained in the CVA proposal. If a creditor is not happy with how the CVA is being carried out, this should be raised with the supervisors or their staff in the first instance.

If the creditor is still not satisfied, a complaint can be made to the Recognised Professional Bodies of the supervisors via the Complaints Gateway managed by the Insolvency Service. Details of the supervisors’ Recognised Professional Bodies can be found on correspondence, reports, Companies House and on this website.

As previously noted, the CVA proposals and supervisors’ progress reports set out dividend prospects along with the expected amount and timing of dividends (where applicable).

A statement of claim form can be found on this website.

Guidance on how to complete a statement of claim form can be found here.

The proposal for the CVA, referred to above, sets out the terms of the arrangement including the proposed timescale etc.

In addition, progress reports are made available for all creditors within two months of every year that elapses in a CVA. Progress reports provide an update on the CVA including any changes to the strategy and the estimated outcome to creditors.

These progress reports will be available to view online.

A paper copy of the proposals or progress reports can be requested from the supervisors and will be sent out free of charge. Details of who to contact are available on the website.

A CVA does not in itself have any direct consequences for employees. However, a CVA may be part of a restructuring being undertaken by the business which may or may not involve redundancies. Employees should consult with their managers in this respect.

If a company cannot afford to meet the entitlements due to employees made redundant as part of a business restructuring strategy, it can elect to compromise employee entitlements through a CVA. In such circumstances, employees are likely to be eligible to recover certain entitlements from the Redundancy Payments Service (‘RPS’).

The UK Government established the RPS to assess and make payment to employees for their statutory entitlements to redundancy and associated payments (where their employer is insolvent).

The RPS website is here.

Liquidation is the process by which an entity’s assets are realised and distributed to satisfy, as far as possible, its creditors and, if applicable, shareholders. The term winding-up is also used. Liquidation is usually a terminal process, resulting in the dissolution of the entity. Most entities which go into insolvent liquidation have already ceased trading and it is very unusual for a liquidator to be able to carry on the business. Even when an entity is still trading when it goes into insolvent liquidation, a liquidator will rarely continue to trade the business as their powers to do so are limited.

There are two types of insolvent liquidation:

• Where the entity itself resolves to go into liquidation.

• Where the court makes a winding-up order on the petition of either an unpaid creditor, the entity itself, its directors or its shareholders.
• Both of these processes are dealt with in more detail within the other FAQs below. An insolvent liquidation may also follow another form of insolvency process, such as an administration or a receivership, as a mechanism for distributing funds to creditors. In this case, the office holder would make the petition to wind-up the entity.

• In an MVL (or ‘solvent liquidation’), the entity is able to pay its debts in full together with interest within one year of being placed into liquidation. This process is used where the entity has fulfilled its purpose, when the shareholders wish to realise their investment or as part of a group reorganisation. As this process is only available for solvent entities, this type of liquidation is not detailed any further in these FAQs.

The Liquidators are Licensed Insolvency Practitioners, who are authorised to act by a Recognised Professional Body. The liquidators’ details can be found on correspondence, reports, at Companies House and on this website.

The liquidators are often referred to as the “Joint Liquidators”, as in most cases there will be more than one liquidator appointed over an entity.

When the court grants a winding up order, it may first appoint a provisional liquidator or interim liquidator. A permanent liquidator will subsequently be appointed in place of the interim liquidator, although a provisional liquidation may simply be terminated.

The liquidators realise the assets of the entity and distribute them for the benefit of the creditors as a whole; acting in the best interests of all such creditors. In addition, the liquidators have a number of statutory duties set out in the Insolvency Act 1986,as amended and The Insolvency (Scotland) (Receivership and Winding Up) Rules 2018.

• deciding on the best strategy for the liquidation to achieve the best outcome reasonably possible in the circumstances;
• identifying and securing the assets of the entity;
• selling or disposing of the assets;
• securing and retaining the books and records of the entity;
• collecting debts due to the entity;
• notifying prescribed parties of the liquidation;
• dealing with creditor queries;
• agreeing creditor claims and distributing funds where available
• dealing with the entity’s employees;
• reporting on the conduct of the directors;
• investigating any suspected misconduct by the directors or other officers of the entity and bringing proceedings where appropriate and where he/she has the funding to undertake the process, and;
• reporting to creditors.

When a liquidation follows an administration (or another form of insolvency) often the only asset to distribute to creditors will be the cash held, although some unrealised assets may be passed from the administration for realisation in the liquidation.

If a dividend is to be paid, the liquidators will agree creditor claims in order to establish each creditors' share in the distribution. If there are a large number of creditors, or complex claims, this may be an involved process that can take some time.

Creditors can assist the liquidators to make this as efficient as possible by submitting their claim together with supporting documentary evidence as soon as possible, and responding to all correspondence promptly.

In a CVL, the shareholders (also known as members) pass resolutions to wind-up the entity and appoint a liquidator. A 75% majority is required for these resolutions to be passed. The directors of the company must then seek a decision of the company’s creditors, at which time the creditors make a decision to confirm the shareholders’ choice of liquidator or appoint a different liquidator. A majority (i.e. in excess of 50% of the value of the creditors voting) is required for the decision to be made.

A court liquidation is commenced via the court and can be instigated by any creditor who is owed over £750 by the entity or by the entity’s directors or its shareholders. Another type of office holder may also petition to wind-up the entity (for example an administrator) in certain circumstances.

The process starts by the relevant party petitioning the court for a winding-up order. There are a number of grounds for the petition, although the most common (especially for a creditor petition) is on the basis that the entity is unable to pay its debts.

The petitioner has to demonstrate in the petition that the entity owes it more than £750 and that the entity cannot pay its debts as and when they fall due (i.e. that it is insolvent). The latter can be established by the creditor issuing a statutory demand for payment and the entity failing to pay the debt demanded within 21 days.

When the court grants a winding-up order, an insolvency practitioner must be nominated to take the appointment as either a provisional or interim liquidator (Scotland). The provisional and interim liquidators are officers of the court.

The interim liquidator will subsequently seek proposals from the company’s creditors for the nomination of a person to be liquidator of the company in place of the interim liquidator.

When an entity goes into liquidation, the costs of the liquidation proceedings, including the liquidators’ remuneration and outlays, are paid from the assets of the entity.

The basis and amount of liquidators’ remuneration and outlays must be approved before any remuneration can be drawn.

In a creditors’ voluntary liquidation and court liquidation, the basis for fixing the liquidator’s (including an interim liquidator’s) remuneration and outlays is determined by the Liquidation Committee, or if there is no Liquidation Committee, or the Committee does not make the requisite determination, the liquidator’s remuneration and outlays are fixed by the court.

Unlike an administration, there is no set duration for a liquidation. A liquidation will remain open for as long as it takes to realise all of the entity’s assets, deal with all investigatory matter and if funds allow, agree creditor claims and distribute funds to the creditors. When a liquidator is ready to close the liquidation, they will present their final account and report to the creditors. A notice of final account prior to dissolution must be filed at Companies House and the Accountant in Bankruptcy (the ‘AiB’), following which the entity is placed into dissolution and automatically dissolved three months thereafter.

When a liquidator is ready to close the liquidation, they will prepare a final account for creditors and seek release from office. Should there be no objections from creditors, the liquidator will automatically be released from office on delivering a copy of their final account to Companies House and the AiB, following which the entity is placed into dissolution and automatically dissolved three months thereafter.

TThe directors’ powers cease on the appointment of liquidators; however, the liquidators may require their assistance.

If a director has given a personal guarantee to any creditors, they is likely to be called upon to pay them.

If a director is also an employee of the entity (as is often the case), they will be subject to the same process and claims as employees generally.

The directors of an entity in liquidation have a duty to prepare and submit a Statement of Affairs. In a CVL, this is presented to the creditors prior to the initial creditors’ decision. The proposed liquidator may assist with its preparation.

In a court liquidation, the liquidator may require the directors to prepare and submit a Statement of Affairs after their appointment.

As part of the liquidators’ statutory duties, a report on the conduct of the directors must be submitted to the Insolvency Service. This report is confidential and its contents cannot be disclosed by the liquidators. Following the liquidators’ report, the Insolvency Service will determine whether any action should be taken against the directors, for example, seeking to disqualify a director from acting as a director of another entity, as a result of his or her conduct.

If a creditor wishes to bring any matters to the attention of the liquidators in relation to the conduct of the directors, they can do so in writing.

The liquidator has a duty to investigate potential claims against third parties and the directors and any recoveries that can be made for the benefit of creditors as a whole. These investigations are in addition to producing a conduct report on the directors.

If a creditor is not happy with how the liquidation is being carried out, this should be raised with the liquidators or their staff in the first instance.

If the creditor is still not satisfied, a complaint can be made to the Recognised Professional Bodies of the liquidators, via the Complaints Gateway managed by the Insolvency Service. Details of the liquidators’ Recognised Professional Bodies can be found on correspondence, reports, Companies House and on this website.

A creditor is anyone who can demonstrate they are owed money, goods or services by an entity.

There are various types of creditor. The main types are listed below:

• A secured creditor (often a bank) has a charge, registered at Companies House, over some (or all) of the assets of the entity.
• Creditors wishing to enforce any form of security should immediately notify the liquidators in writing and provide appropriate supporting security documentation.

• A fixed charge creditor is a secured creditor which has a charge allowing it to exercise control over specific assets of the entity (for example a property).

• A floating charge creditor is a secured creditor which has a charge over some or all of the assets of the entity but does not have control over each asset; allowing the entity to deal with them freely.

A preferential creditor is one or more of the following:

• an employee who is owed arrears of wages up to a statutory maximum (any balance owed above this maximum is an unsecured claim);
• an employee with outstanding holiday pay; or
• an employee who is owed certain pension contributions;
• certain other amounts listed in the Insolvency Act 1986; and
• HMRC rank preferentially for certain taxes only, including for VAT, PAYE, CIS tax and employees’ National Insurance Contributions (‘NIC’) for insolvency appointments made on or after 1 December 2020.’ However, this is secondary to employee preferential creditors. This essentially means that HMRC will not be repaid any of their secondary preferential debt until all employee preferential claims have been paid in full. HMRC remain an unsecured creditor for any other type of tax, for example, corporation tax. Certain claims form the Financial Services Compensation Scheme (‘FSCF’) also rank alongside HMRC as secondary preferential creditors.

Preferential creditors have no security over any assets of the entity but are paid in priority to floating charge creditors and unsecured creditors.

• Unsecured creditors have no security over any of the assets of the entity. They will typically include trade suppliers, landlords, utility providers, customers and any employee claims which do not rank preferentially.

The amount of money creditors receive will vary depending on the circumstances of the case, and where they rank in the order of payments.

The Insolvency Act 1986 sets out the order in which the liquidators must distribute the assets of the entity:

Please note that in some cases there will not be sufficient funds to allow payments to be made to some (or all) categories of creditors.

In cases where there are sufficient funds to enable payment to unsecured creditors, it is likely that unsecured creditors will not be repaid in full (due to the insolvency of the entity). Instead, unsecured creditors receive a proportion of the amount they are owed. This is referred to as a dividend and is expressed as the amount of pence received for each pound of their debt. All unsecured creditors rank equally for unsecured dividends.

The liquidators’ progress reports set out the dividend prospects for each class of creditor.

• realise the assets of the entity, including any potential realisations from investigations into claims against third parties and directors;
• settle or accrue for the expenses of the liquidation, and
• agree the claims of the classes of creditors to receive the dividend.

Any or all of the above steps may include factors which are uncertain, complex or time consuming to resolve; however, the liquidators will provide creditors with timescales and an estimate of amounts to be distributed as soon as they are able to do so.

The liquidators’ progress reports set out dividend prospects along with the expected amount and timing of dividends (where applicable).

A statement of claim form can be found on this website.

Guidance on how to complete a statement of claim form can be found here.

Progress reports are made available to all creditors within six weeks of every 12 month period that elapses in a liquidation, unless a progress report is issued earlier as a final progress report. Progress reports provide an update on the liquidation, including details of asset realisations and costs incurred and the estimated outcome to creditors.

These progress reports will be available to view online.

The initial creditors’ decision procedures

In a creditors’ voluntary liquidation, an initial creditors’ decision procedure will be commenced following a meeting of the entity’s shareholders to put the entity into liquidation. This will be either a deemed consent procedure or a virtual meeting. The decision date can be up to two weeks after the shareholders’ meeting to wind-up the entity.

The initial creditors’ decision or deemed consent procedure is to make decisions on:
• the liquidators’ appointment;
• the appointment of a Liquidation Committee the appointment of a Liquidation Committee (should creditors wish one to be formed and sufficient creditors are willing to act as members of the committee).

Court Liquidation

In a court liquidation, where the court appoints an interim liquidator, the interim liquidator will invite creditors to propose nominations for an alternative liquidator shortly after appointment. Where nominations have been received, a creditors’ decision procedure will be instigated within 28 days from appointment to conclude who should be the alternative liquidator. Where creditors do not provide such nominations, the interim liquidator will revert back to the Court to make the appointment.

The initial creditors’ decision procedure is to make decisions on:
• the liquidators’ appointment;
• the appointment of a Liquidation Committee the appointment of a Liquidation Committee (should creditors wish one to be formed and sufficient creditors are willing to act as members of the committee).

Creditors will also be notified of the procedure to requisition a physical meeting to consider the decisions, should they wish an actual meeting to be held instead.

Further creditors' decision procedures

• Creditors' voluntary liquidation

• Can I request a decision at any time?

• Court liquidation

Should a physical creditors’ meeting be requisitioned, the meeting will discuss the matters that the liquidators were seeking a decision on. Decisions to be voted upon will be set out in the formal notice of the meeting sent to creditors. Where a creditors’ meeting is requisitioned, all creditors will be notified of the date and venue should they wish to attend. Meetings are generally of a formal nature and there is no requirement for creditors to attend in person unless they wish to do so, they can instead submit a proxy form.

Any creditor of the entity is entitled to vote at the creditors’ meeting.

Any creditor whose debt is treated as a small debt (i.e. £1,000 or less) must still deliver a statement of claim together with documentary evidence of the debt if they wish to vote. Any creditor who has opted-out from receiving notices may still vote, provided they provide a statement of claim and documentary evidence.

If the creditor is an entity, an authorised representative must submit:

• a proxy form in order to nominate an individual to represent the entity at the meeting; and
• a valid statement of claim form with documentary evidence must accompany the proxy form.

If the creditor is an individual or partnership, they must submit:

• a valid statement of claim form (with documentary evidence); and
• only if they wish to nominate another individual to represent them at the meeting, a proxy form.

A secured creditor is entitled to vote only in respect of the balance of their debt (if any) after deducting the value of their security, as estimated by them.

If a creditor wishes to vote but cannot attend the meeting, then it is possible to vote at the meeting by submitting a proxy form.

Any creditor whose debt is treated as a small debt (i.e. £1,000 or less) must still deliver a statement of claim together with documentary evidence of their debt if they wish to vote. Any creditor who has opted-out from receiving notices may still vote, provided they provide a statement of claim and documentary evidence.

A creditor may use the proxy form to nominate either:

• an individual to represent them at the meeting; or
• the Chair of the meeting (usually one of the liquidators) to cast the vote on their behalf.

The proxy form is a formal instruction to an individual to vote on the creditor’s behalf. The proxy can be used to instruct the individual to vote in a specific manner (i.e. for or against) or allow them to use their discretion at the meeting.

Guidance on how to complete a proxy form can be found here.

The Liquidation Committee represents the interests of the creditors as a whole, rather than the interests of certain parties or individuals.

The statutory function of a Liquidation Committee is to help the liquidators to discharge their responsibilities. There is no requirement to form a Liquidation Committee and it is up to creditors whether they wish to do so.

If a Liquidation Committee is formed it is for that body, for instance, to approve:

• the basis and amount of the liquidators’ remuneration and disbursements;
• the drawing of certain disbursements; and
• the payment of unpaid pre-liquidation costs (including the fee for commencing the initial decison procedure and for assisting the directors in the production of the Statement of Affairs).

Members of the Liquidation Committee are not remunerated for their time. Other than receiving reasonable travel expenses for attending committee meetings, they receive no payment from the entity.

A Liquidation Committee can be formed as a result of a decision procedure at any time during the course of the liquidation (but is generally at the initial decision procedure where the liquidators’ appointment is confirmed). Creditors will be invited to consider whether a Liquidation Committee should be established, provided sufficient creditors are willing to be members of the committee. The minimum number of committee members is three and the maximum is five. In order to enable creditors to make an informed decision, a guidance note on the formation of a Creditors’ Committee and the role of a committee member has been published and can be found at the following link: https://www.r3.org.uk/media/documents/publications/professional/R3-Guide-to-Creditors-Committees.pdf

As soon as the entity’s affairs are fully wound-up, the liquidators must make up an account of the liquidation (their final report) showing how it has been conducted and how the entity’s property has been disposed of. The liquidators will then file the final account together with the relevant notice confirming no creditors have objected to their release at Companies House and with the Accountant in Bankruptcy (the ‘AiB’). Should there be no objections from creditors, the liquidator will automatically be released from office on delivering a copy of their final account to Companies House and the AiB, following which the entity is placed into dissolution and automatically dissolved three months thereafter.

A creditor may at any time elect to opt-out of receiving further documents relating to the insolvency proceedings. Importantly this will not affect the creditors’ entitlement to receive dividends, where funds are available to distribute.

Where a creditor has elected to opt-out, the opt-out does not apply, and documentation will still be sent out, in relation to:

1. Any notices which the Insolvency Act 1986 requires to be delivered to all creditors;

2. A notice of change in the officeholder or any changes to the contact details for the office-holder;

3. Any notices of distributions, intended distributions and notices required by Court order; or

4. Any document accompanying any of the notices within (1) to (3) above.

Yes. The Joint Liquidators’ Progress Reports will be posted onto the Insolvency Portal and any creditor will still be able to access these at any time by using the link provided in the initial correspondence from the Joint Liquidators.

Creditors will also be able to access any other documents uploaded to the Portal.

No. Opting-out does not affect a creditor’s entitlement to receive dividends should any be paid to creditors.

Opting-out also does not affect a creditor’s right to vote in a decision procedure or participate in a deemed consent procedure, although a creditor will not receive notice of it.

If a creditor wishes to opt-out, they must do so by returning a signed and dated opting-out notice to the Joint Liquidators.

The Joint Liquidators will, in their first communication with the creditors, advise them of their ability to elect to opt-out and will provide a notice setting out the legislative requirements.

An opt-out notice is also available on the website for completion if required.

The opt-out starts as soon as a signed notice has been received by the Joint Liquidators.

A creditor may revoke their election to opt-out at any time by completing a further notice in writing. An opt-back notice is located on the website for completion if required.

A creditor who opts out will be treated as having opted out in respect of any consecutive insolvency proceedings in respect of the Company i.e. the subsequent liquidation where the Company moves from administration to liquidation.

A creditor will remain an opted-out creditor for the duration of these and any other subsequent proceedings unless the creditor revokes their election to opt out as above.

In some cases staff will have been made redundant prior to the appointment of the administrators, liquidators, receivers or supervisors (‘office holders’). In any case, the office holders’ staff will communicate with all employees shortly after their appointment to explain what this means for employees.

Employees will be sent a redundancy letter, together with an information fact sheet on how to make specific claims from the Redundancy Payments Service (‘RPS’). Employees can make a claim by visiting the RPS website www.gov.uk/claim-redundancy and will need the reference number given in the redundancy letter to make the online claim.

The UK Government established the RPS to assess and make payment to employees for their statutory entitlements to redundancy and associated payments (where their employer is insolvent).

The RPS website is https://www.gov.uk/your-rights-if-your-employer-is-insolvent.

Claims to the RPS must be made online, via the RPS website www.gov.uk/claim-redundancy. Upon redundancy, employees will receive a redundancy letter from the office holders employee representative. The letter will include an explanatory fact sheet provided by the RPS on how to make a claim to the RPS online. The office holders employee team can assist you through the process of completing this where necessary.

Employees are entitled to claim:

• arrears of salary/wages;
• outstanding holiday pay;
• redundancy pay;
• pay in lieu of notice; and
• pension contributions arrears.

The amount of redundancy pay that employees receive is dependent on age and years of service. A calculator for redundancy pay can be found here.

Employees may be owed more than the amount paid by the RPS if they earn more than the statutory weekly limit, or if their employment contract entitles them to redundancy pay or notice pay over and above the statutory limits.

In these circumstances, employees will have a residual claim and will rank as a creditor in the insolvent entity. This may be paid in the event there are sufficient funds available to pay a dividend to creditors. There are two types of claim:

Preferential Claims

Any amounts that employees are owed above the RPS statutory limits for arrears of wages (for up to four months prior to the insolvency process commencing, or date of redundancy if that is different, up to a maximum of £800), all accrued holiday pay and certain unpaid pension contributions are classed as preferential claims.

Preferential claims are paid from available funds in the insolvent estate before unsecured claims (trade creditors, suppliers, utility companies etc.) and floating charge creditors.

Unsecured Claims

Arrears of wages in excess of £800 will be classed as an unsecured claim. In addition, any amounts employees are owed above the RPS statutory payments for pay in lieu of notice or contractual redundancy pay are also classed as unsecured and will be paid if there are funds available to pay a dividend to unsecured creditors.

Details of all of the payments that employees are entitled to claim can be found on the RPS fact sheet here.

Details of all of the payments that employees are entitled to claim can be found on the RPS fact sheet here.

This information can be obtained from your payroll department, HR contact or the office holders’ employee representative.

Details of all of the payments that employees are entitled to claim can be found on the RPS fact sheet here.

Please note that the RPS will deduct the following from your pay in lieu of notice:

• any wages you receive from new employment; or
• any benefits such as Job Seekers Allowance that you would be entitled to claim (even if you do not claim them).

It is therefore important that you claim all benefits that you are entitled to.

A link to the Jobcentre Plus website can be found here.

Any expenses incurred prior to the date of the appointment of the office holders are an unsecured claim in the insolvency and will only be paid if there are sufficient funds available to pay a dividend to unsecured creditors. Employees should provide any supporting documentation for their expenses to one of the office holders’ staff.

Employees should contact Jobcentre Plus as soon as they are made redundant. This can be done by telephone or by visiting the Jobcentre Plus website:

If deductions have been made from employee wages by the entity and not paid over to the pension company, these (together with any unpaid employers’ contributions) can be claimed from the RPS.

The office holders’ employee representative will process claims for these amounts on behalf of employees, it is therefore not necessary to include these on the RP1 claim form. The payments will be sent directly to the pension company/trustees.

If employees are owed SMP they should contact the HM Revenue & Customs Statutory Payments Team on 0191 225 5221 or go to www.hmrc.gov.uk.

If employees are owed SSP they should go to the Department for Work & Pensions website at www.dwp.gov.uk.

The RPS aim to make payments to employees within six weeks, but this timescale can vary.

P45s will be sent to employees’ home addresses as soon as possible. If an employee is moving house, it is important that they provide the office holders’ employee representative with their new address as duplicate copies of P45s cannot be provided.