Insolvency advice is expensive, and a lot of people pay for a full IP-led process when they did not need one — or pay top fees for document work they could have done themselves. Here is exactly when an IP is legally required, when it is not, and how to keep the bill down either way.
When you legally NEED a licensed insolvency practitioner
These are formal procedures under the Insolvency Act 1986 — the law reserves the formal appointment to a licensed IP:
- Creditors’ Voluntary Liquidation (CVL) — closing an insolvent company.
- Members’ Voluntary Liquidation (MVL) — closing a solvent company tax-efficiently.
- Company Voluntary Arrangement (CVA) — a nominee/supervisor IP is required.
- Administration and pre-pack administration — an administrator (IP) is appointed.
- A Part A1 moratorium — a monitor (IP) oversees it.
- For individuals: an Individual Voluntary Arrangement (IVA) needs a supervisor IP.
When you do NOT need one
- Striking off (dissolving) a company that has stopped trading and has no debts — this is a DIY Form DS01.
- Time to Pay arrangements with HMRC, and informal payment deals with creditors — you negotiate these yourself.
- Responding to a statutory demand or a winding-up petition — you can prepare your own response or application to set aside.
- Director correspondence, board minutes, and getting your affairs in order before you take advice.
What you can always do yourself — to cut the fees
Even where an IP is required for the formal step, most of the fee is document preparation and case admin you can do first, to a professional standard:
- The directors’ statement of affairs (assets, liabilities, creditors).
- The background narrative and, for a CVA, the proposal — see the CVA self-help guide.
- Creditor lists, correspondence and the supporting paperwork.
Hand a smaller, independent IP a clean, complete pack and the fee falls — you are paying for the regulated appointment, not for hours of preparation.
If you do appoint one — choose wisely
Consider a smaller, local, independent practitioner rather than a large national firm: more personal service, clearer communication, fewer conflicts of interest and more competitive fees — and you deal directly with the person handling your case. Always ask for a written fee estimate and check the practitioner’s regulatory record with their licensing body before you appoint.
Do the work yourself — then choose your IP wisely
Most of what an insolvency costs is preparation and paperwork — the statement of affairs, board minutes, resolutions, creditor lists and correspondence. You can prepare all of that yourself first, to a professional standard, which is where the biggest saving sits. The only part that legally requires a licensed insolvency practitioner is the formal appointment itself — a CVA, administration, moratorium, or a creditors’ or members’ voluntary liquidation (and an IVA for individuals).
When you do need one, choose carefully:
- You are not obliged to instruct a large national firm — and bigger does not mean better value. Smaller, local, independent practitioners are regulated by the same bodies and routinely quote lower, fixed fees for the same statutory appointment.
- Get two or three written quotes and compare exactly what is included — and what is billed as an extra.
- Ask for a fixed fee where possible, and ask how much of the groundwork you can hand over already prepared to bring it down further.
- Check the licence — confirm the individual is authorised on the public register before you engage them, and if a practitioner ever falls short, you can complain about them for free.
Prepare the documents yourself, instruct a local practitioner on a fixed fee, and you keep control of both the process and the cost.
Frequently asked questions
Can I liquidate my company without an insolvency practitioner?
No — a CVL or MVL legally requires a licensed liquidator. But a debt-free dormant company can be closed yourself by striking it off (Form DS01), and you can prepare the statement of affairs yourself to cut the liquidator’s fee.
How do I find a good independent insolvency practitioner?
Look for a smaller, local, independent firm; ask for a written fee estimate up front; and check they are licensed by a recognised professional body. Compare two or three.
What does an insolvency practitioner actually cost?
Most of the bill is preparation and case administration. Do the groundwork yourself and the regulated appointment costs far less — see how to cut CVA fees.
See also: How to complain about an insolvency practitioner — the free Complaints Gateway, the time limit, and what it can achieve.