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Who Pays the Fees for an Insolvency Practitioner?

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Posted in: Insolvency 12 Oct 23

When a company is facing financial difficulties, the director may choose to appoint an Insolvency Practitioner to manage the process of restructuring or winding up the company. One question that often arises is, who pays the Insolvency Practitioner’s fees? In this blog post, we will discuss the responsibilities of the company, the Insolvency Practitioner, and their fees.

Responsibility of the Company:

The company is responsible for the payment of the Insolvency Practitioner’s fees. However, if the company is insolvent, the fees must be paid from the company’s assets.  These could include any cash in the bank, money due from customers or from physical assets which can be sold.  If there are no assets available to pay the fees, the Insolvency Practitioner will not be able to take on the case until they have been guaranteed payment. In this instance, the director may choose to pay the fees from their own personal funds. It is important to note that, depending on the type of insolvency process being undertaken, the fees can vary.

Responsibility of the Insolvency Practitioner:

The Insolvency Practitioner is responsible for issuing an engagement letter to the company, which includes all the terms and fees involved in the service being provided. The Insolvency Practitioner must also provide regular updates on the case and the fees involved. In addition, the Insolvency Practitioner must keep accurate records of the time spent on the case in order to determine their fees.

Calculating the Fees:

The fees charged by an Insolvency Practitioner are calculated based on the type of insolvency process being undertaken and the complexity of the case. The fees can be determined by either a fixed fee structure or a percentage of the assets being dealt with. A fixed fee is usually a set amount for the entire case. A percentage fee is calculated based on the value of the assets being dealt with. It is important to discuss the fee structure with your Insolvency Practitioner before commencing the service.

Reviewing the Fees:

If you are in any doubt about the fees being charged by your Insolvency Practitioner, you can request a review of their fees. However, it is important to note that any additional work required to complete the review will incur additional fees. If you are unable to resolve the fee dispute with the Insolvency Practitioner, you can contact the regulatory body for further assistance.


Appointing an Insolvency Practitioner can be a difficult decision for any company director, especially in times of financial distress. It is important to understand who is responsible for paying the Insolvency Practitioner’s fees and how they are calculated. As a company director, you should always ensure that you have a clear understanding of the fees involved before engaging an Insolvency Practitioner. If you are in any doubt, seek professional advice to ensure you make an informed decision.

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Robin Tarling

Advice you can trust.