Contractors won't get many results if they Google "unlicensed insolvency advice." That's probably a good thing.
But it doesn't mean that unlicensed insolvency advice isn't rife.
In fact, the insolvency industry has this year alone been plagued with rogue insolvency advisers, aspiring to reinvent the wheel with non-compliant, cloak-and-dagger alternatives.
Unlicensed insolvency advice: definition
Unlicensed insolvency advice is often a more deadly grade of disingenuous than merely unqualified insolvency advice, where the adviser doesn't really know their onions.
Rather, it's practitioners make more of an attempt to mislead limited company contractors that, as an IP, they are the genuine, licensed article. When they're not, writes Dave Broadbent, a partner at UK Liquidators.
What is licensed insolvency advice, and why does it matter?
For the avoidance of doubt, insolvency is a regulated profession governed by the Insolvency Act 1986. Acting as a liquidator and administrator are activities strictly reserved for licensed insolvency practitioners, as only they have the legal authority to act in relation to an insolvent company.
Insolvency practitioners are rigorously trained and have a comprehensive understanding of insolvency law. And if insolvency law is flouted, expect an investigation into director conduct, director disqualification, costly fines, or even prosecution.
Who flouted insolvency law in 2025?
Paying no mind in 2025 to these warnings were Atherton Corporate (UK) and, more recently, Davis Acquisitions Ltd, now defunct, both of which the Insolvency Service have now caught up with.
Atherton Corporate UK paid Neville Taylor more than a quarter of a million pounds to become the sole director of around 400 companies that had shut shop, but had not yet entered liquidation. Taylor faced a nine-year ban which resulted in relinquishing his role as director. At the date of insolvency for around 12 companies, more than £7.6million in assets could not be accounted for. Taylor's nine-year ban prevents him from being involved in the promotion, formation or management of a company without the permission of a judge.
These are the company closure marketing messages to beware…
Davis Acquisitions Ltd acted as a vehicle to avoid formal insolvency procedures.
Websites traced back to Davis Acquisitions Ltd promised limited company directors that they could "leave their debts behind."
The sites also claimed that company directors wanting to wind up could avoid "difficult insolvency proceedings" by selling their companies within 48 hours.
False economy
We get it. Appointing a licensed insolvency practitioner is an expense which every Personal Service Company contractor hopes to avoid. But without a licensed insolvency practitioner on your side of the table to fulfil legal requirements and ensure tax-efficiency, the consequences can be even more costly.
The truth is, when shopping for licensed insolvency advice, the more complex the case, the higher the fees, and the more experienced the professional, the greater the rate.
The clue is in the price tag
When insolvency services are marketed with a fixed price tag, pay attention to the fine print. And if that service is very widely marketed, then pay extremely close attention to the fine print!
Is the price quoted the average price, or a starting point rooted at the lower end?
Check what's included, and asterisk any additional payments that may be required, such as VAT, disbursements, or expenses, as these will vary depending on the insolvency route.
How much is an MVL, or CVL?
Ranging from "fixed-fee" MVLs (Member's Voluntary Liquidations) at £950, to "instant" CVLs (Creditors' Voluntary Liquidations) from £1,499, contractors will find that the price range varies between providers and products.
Best-practice, especially if you like avoiding nasty surprises later down the line, is to actually speak to a licensed insolvency practitioner and obtain a quote tailored to your full circumstances.
Do you HAVE to talk to an IP before buying?
If you're comparing price points, but have not telephoned the licensed IPs on the end of those competing services, validate the advertised prices from the get-go in other ways, such as in writing.
Next, make sure you more than just skim over the pricing structure which you get back, so you can be sure that the arrangement is fair and affordable.
At this stage, be reassured that before any work commences, you must explicitly give the 'green light.'
Insolvency Practitioner Costs/Fees: Five factors
Here are some additional pricing factors that determine the cost of a licensed insolvency practitioner:
- Insolvency procedure: The role and responsibilities of a licensed insolvency practitioner vary based on the insolvency procedure.
If a company liquidation is sought, they will act as the liquidator, and if a company enters administration, they will act as the administrator. Both roles are distinctively different.
- Business structure: The structure of your contractor business may influence the level of support required and therefore, the price. For example, restructuring a business with an overly complex structure will require more resources, time and expertise than a clear-cut, straightforward liquidation.
- Pricing structure: There are three pricing structures that insolvency practitioners typically operate on:
- An hourly rate.
- A fixed fee.
- An asset-based fee (based on % of funds recovered).
The size of your contractor business and its turnover will largely influence the payment structure proposed by the insolvency practitioner.
Be aware, while a licensed IP may charge a fixed fee for a simple Creditors' Voluntary Liquidation, a company administration involving a high number of creditors (or employees) may be billed differently to factor in the sheer volume of work potentially involved.
- Seniority: A senior IP, who is licensed, operating at the director-level, is likely to charge more than a manager.
If you're set on a particular insolvency practice, but the price is a sticking point, ask if there's lower-level staff available, charging a cheaper rate. Alternatively, enquire if the licensed provider has a dedicated office which handles lower-debt cases for a lower price.
- Area of expertise: An insolvency practitioner with a niche speciality may have a higher rate due to their technical knowledge and industry insights.
How you can check if an insolvency practitioner is licensed
When browsing insolvency advice, an under-inflated or over-inflated price tag should usually raise a red flag.
If you're unsure whether to proceed due to price, there's no harm in checking credentials to confirm that the insolvency practitioner is, in fact, licensed.
When in doubt, search the Insolvency Service directory, which details the authorising body.
Who are the insolvency industry's Recognised Professional Bodies?
The 'Recognised Professional Bodies' (RPB) authorise and regulate insolvency practitioners across the UK.
The RPBs are:
- The IPA (Insolvency Practitioners Association);
- The ACCA (Association of Chartered Certified Accountants), and;
- The ICAEW (Institute of Chartered Accountants in England and Wales), and the Scottish equivalent.
Once you're alright on price, check back on those marketing messages or product promises.
Quick Tip: If an insolvency adviser promises a "No questions asked" escape from company liabilities — if it's not the law of the land, it's probably not legal. While an easy lure, such false promises usually come with a hidden price tag. And that price may extend to a director ban.
Seeking a licensed IP? Conclusion for contractors
While on your search for a licensed insolvency practitioner, their reputation, a quick turnaround time, and their website's marketing should never trump price, because failing to pursue the legal routes prescribed to licensed insolvency practitioners can be fatal for your pocket, reputation and future as a company director.
