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Our guides for directors, employees and creditors

We hope you find these guides, which you can download and print, helpful. If you have a specific query, please get in touch.

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Depending on your situation, you can apply to the government for:

  • redundancy
  • holiday pay
  • outstanding payments like unpaid wages, overtime and commission
  • money you would have earned working your notice period (‘statutory notice pay’)

You may be eligible for unemployment benefits if you lose your job. If you do not apply for benefits after you lose your job, you might get less money in your statutory notice pay payment.

If you’re made redundant

The person who is dealing with the insolvency (the ‘insolvency practitioner’) must tell you how your job is affected and what to do next.

They’ll also give you a:

  • RP1 fact sheet
  • ‘CN’ (case reference) number to use when you apply for money you’re owed

Employment Tribunal

You can make a claim to an employment tribunal if:

You’ll be claiming against the Secretary of State for Business, Energy and Industrial Strategy and your former employer.

If you continue working after the insolvency

You might be asked to continue working for your employer after they become insolvent.

You’ll still be eligible to claim for redundancy pay and other money you’re owed if you’re made redundant later.

NOTE: You cannot claim holiday pay, wages, bonuses or commission that you’re owed between the day of the insolvency and the day you were dismissed. You will need to come to ask the insolvency practitioner how you are to be paid.

If you’re transferred to a new employer

You cannot claim any money from the government if you were transferred before your former employer became insolvent.

If you were transferred afterwards, you can apply for redundancy pay, statutory notice pay and outstanding payments such holiday pay, wages, commission and bonuses.

Redundancy pay

Pay is capped at £643 per week. Length of service is capped at 20 years.

The maximum amount of statutory redundancy pay is £19,290.

Years of service or earnings over these amounts aren’t included in the calculation.

You can’t get less than the statutory amount, but you may get more if your employer has a redundancy scheme. Redundancy pay up to £30,000 is tax-free.

You get:

  • 0.5 week’s pay for each full year worked when you’re under 22
  • 1 week’s pay for each full year worked when you’re between 22 and 41
  • 1.5 week’s pay for each full year worked when you’re 41 or older

Loss of notice pay

You’re entitled to a paid notice period when you’re made redundant, even if it is not in your contract.

You can claim for statutory notice pay if you:

  • did not work a notice period
  • worked some of your notice period
  • worked an unpaid notice period

Your statutory notice pay is worked out as one week’s notice for every year you were employed, up to a maximum of twelve weeks.

Payments are capped at £643 per week

Wages and other money you’re owed

You can apply for unpaid wages and other money you’re owed by your employer, for example bonuses, overtime and commission.

You’re only entitled to money that’s in your employment contract.

You’ll get up to 8 weeks of money you’re owed. It counts as a week even if you’re only owed money for a few days.

Example If you are owed £30 of overtime per week for the last 10 weeks, you’ll get £240 (£30 x 8 weeks).

Payments for wages and other money you’re owed are capped at £643 a week.

You pay income tax and National Insurance when you get unpaid wages and other money you’re owed.

You might be able to claim a tax refund if you’ve paid too much.

Holiday pay

You can get paid for:

  • holiday days owed that you did not take (‘holiday pay accrued’)
  • holiday days you took but were not paid for (‘holiday pay taken’)

You’re only paid for holidays you took or accrued in the 12 months before your employer became insolvent.

You’ll only get payments for up to 6 weeks of holiday days. Holiday pay is capped at £643 per week.

You pay income tax and National Insurance on your holiday payment. You might be able to claim a tax refund if you’ve paid too much.


The stages of the liquidation

You cannot legally liquidate a company on your own. You need a licensed insolvency practitioner to help you. Rob Sadler at Sadlers is licensed to act as a liquidator.

The process has three main stages:

Stage 1: directors

The directors need to meet and agree by a majority that the company is insolvent and needs to be placed into liquidation. They then choose a liquidator. There is no notice needed for this directors' meeting and directors can attend by phone or video link.

Stage 2: shareholders

A shareholders’ meeting is called to pass a special resolution to liquidate the company. This must be passed by 75% of shareholders – but only the shareholders who bother to vote count for this 75%.

This meeting is usually held with at least 14 days’ written notice, but with the consent of more than 90% of all shareholders it can be held on short notice or even immediately.

Stage 3: creditors

You cannot call a physical meeting of creditors anymore. Companies now only have two options and your proposed liquidator will help you decide which is the most appropriate:

1) Call a virtual meeting of creditors with at least three days’ notice, giving them details of how to virtually attend (by video conference or by telephone). The director may still attend on the day of the meeting to meet with the insolvency practitioner and be present to answer any creditor questions and then sign off all the paperwork.

A creditor who attempts to attend on the day will be sent away and asked to telephone in to hear what’s going on.

2) Send creditors a notice of deemed consent, again, with at least three days’ notice. Deemed consent means there is no meeting whatsoever. Instead there is a specified date by which, if no-one objects, the company is deemed to have gone into liquidation.

If, however, 10% of creditors (by value or in number) want an actual physical meeting that they can attend, they can request one and one must be held. This will cause at least a further three day delay to call an actual meeting.

You can give notice to creditors of either process above by email if they are known email users, otherwise by post.

Stages 2 and 3 above (calling the shareholders’ meeting and giving notice to creditors) can be simultaneous. Therefore, the fastest possible time a company can be put into liquidation is effectively four days.

Report and statement of affairs

A report must be sent to all creditors before the virtual meeting or deemed consent, setting out a company history, a statement of affairs (which shows the company’s assets and liabilities), plus other statutory information.

The statement of affairs must be posted to creditors. Everything else can be emailed or posted online with access details given to creditors. Creditors will, therefore, have a chance to look over any documents in advance of a meeting.


The following list is a guide to the documents an Insolvency Practitioner is required to retain:

  • Financial statements
  • General ledgers and journals
  • Cash records
  • Bank statements and loan documents
  • Sales and debtor records
  • Documentation supporting outstanding debts and retentions
  • Unpaid invoices
  • Insurance documents
  • Payroll records
  • Personnel files
  • Accident book
  • Litigation files
  • Taxation records (PAYE / NIC, VAT & Corporation tax)
  • Minutes of director’s meetings
  • All relevant company registers
  • Leases
  • Deeds
  • Electronic copies of important documents

This list is not exhaustive and there may be additional documents that are specific to your business that an Insolvency Practitioner will wish to keep. Do not destroy any company documents before you have discussed doing so with the Insolvency Practitioner.

Generally, operational documentation will not be required to be kept, unless it relates to an asset of the company.

We hope you find these guides, which you can download and print, helpful. If you have a specific query, please get in touch.

Press here to contact us.