If you’re considering closing your company or dealing with business debt, chances are you’ve come across the term “insolvency practitioner” or IP for short. But what exactly do they do, and how are they regulated?
In this blog, we’ll walk you through the key responsibilities of insolvency practitioners, how they are licensed, what standards they must follow, and why it’s so important to choose the right one. Whether your business is facing financial difficulty or you’re just weighing up your options, understanding the role of an IP can help you make the best decisions for your situation.
What Is an Insolvency Practitioner?
An insolvency practitioner is a qualified professional authorised to handle formal insolvency processes in the UK. This includes dealing with both solvent and insolvent companies, as well as individuals who may be facing personal bankruptcy.
In simple terms, an insolvency practitioner steps in when a business or person cannot pay their debts and needs legal and structured help to resolve the situation. Their role is to act in the best interests of creditors, make sure the law is followed, and ensure that assets are dealt with fairly and properly.
What Do Insolvency Practitioners Actually Do?
The specific tasks of an insolvency practitioner depend on the type of insolvency process being carried out. Here are some of the most common roles they take on.
1. Creditors’ Voluntary Liquidation (CVL)
When a company is insolvent and the directors choose to close it voluntarily, an IP is appointed to handle the liquidation. They will:
- Take control of the company
- Sell any assets
- Deal with creditors
- Distribute any funds based on legal priority
They also report on the conduct of directors and make sure everything is done in line with insolvency law.
2. Members’ Voluntary Liquidation (MVL)
This is for solvent companies where directors want to close in a tax-efficient way. The IP will:
- Realise the company’s assets
- Settle any outstanding debts
- Distribute the remaining funds to shareholders
This route is often used during retirement or business restructuring.
3. Company Voluntary Arrangements (CVA)
If a business wants to keep trading but needs time to repay its debts, a CVA might be an option. The insolvency practitioner will:
- Help prepare a repayment proposal
- Present it to creditors
- Oversee the arrangement if it is accepted
This allows the company to avoid liquidation and continue operating under supervision.
4. Bankruptcy and Individual Voluntary Arrangements (IVA)
For individuals, IPs can also act in personal insolvency cases. They handle everything from managing the bankruptcy process to setting up IVAs that help people repay their debts in a structured way.
How Are Insolvency Practitioners Regulated in the UK?
Insolvency is a sensitive area of law, so not just anyone can become an insolvency practitioner. In the UK, all IPs must be licensed and regulated by a recognised professional body.
There are a few main regulators, including:
- Institute of Chartered Accountants in England and Wales (ICAEW)
- Insolvency Practitioners Association (IPA)
- Institute of Chartered Accountants of Scotland (ICAS)
To be licensed, insolvency practitioners must:
- Pass rigorous exams
- Gain practical experience
- Meet ongoing professional and ethical standards
- Be subject to regular monitoring and inspections
Both Jamie Playford and Alex Dunton from Simple Liquidation are licensed UK insolvency practitioners. They are regulated by the ICAEW and have decades of experience in handling complex and straightforward insolvency cases alike.
The Legal Duties of an Insolvency Practitioner
When an insolvency practitioner is appointed, they take on serious legal duties. These include:
- Acting fairly and impartially
- Putting creditors’ interests first
- Managing assets responsibly
- Ensuring proper records and reports are kept
- Reporting director misconduct where appropriate
Failure to meet these duties can lead to professional consequences and even legal action. That’s why it is so important to work with a reputable and experienced IP who takes these responsibilities seriously.
The team behind Simple Liquidation has built a reputation for professionalism and integrity. Our goal is to make the process transparent, efficient, and as stress-free as possible for directors and stakeholders.
How Do You Choose the Right Insolvency Practitioner?
With so many firms out there offering insolvency services, it’s easy to feel overwhelmed. Here are some tips to help you choose the right insolvency practitioner for your situation.
1. Check Their Credentials
Always make sure the IP is licensed by a recognised UK body like the ICAEW or IPA. You can check this online through the Insolvency Service’s public register.
2. Look for Experience
Insolvency can be complex. Choose someone who has handled businesses of your size and sector. Experience really does matter when it comes to dealing with creditors, leases, employee claims, and tax issues.
3. Avoid Middlemen and Sales Agents
Some websites and companies act as lead generators or brokers. They are not licensed themselves and simply pass your details on. Always deal directly with a licensed firm like Simple Liquidation where you are speaking with the professionals who will actually handle your case.
4. Understand the Fees
A good insolvency practitioner will be upfront about costs. Ask for a clear breakdown of fees and make sure there are no hidden charges. Transparency is key.
5. Make Sure They’re Approachable
Insolvency is a stressful situation. You need someone who listens, explains things clearly, and guides you through the process with empathy and clarity.
Simple Liquidation was created with exactly that approach in mind. We’re not here to sell or scare. We offer straight-talking, professional advice tailored to your circumstances.
What Happens After You Appoint an Insolvency Practitioner?
Once you formally appoint an IP, they will take over the running of the company in relation to the insolvency process. This means they will:
- Deal with creditors directly
- Handle staff matters
- Notify Companies House and HMRC
- Take over legal responsibilities
You are no longer personally responsible for chasing creditors or managing stressful negotiations. Everything goes through the IP. It’s often a huge relief for directors who have been carrying the weight of financial stress for months or even years.
The Simple Liquidation Difference
Simple Liquidation is not a broker, sales firm, or call centre. We are a team of licensed insolvency practitioners with real-world experience helping UK businesses close properly, lawfully, and with dignity.
Our professionals are members of the Insolvency Practitioners Association, the ICAEW, and the Association of Business Recovery Professionals (R3). With over 30 years of combined experience, we’ve helped hundreds of directors across the UK deal with their company’s debts and move on with confidence.
We know the process can be daunting, especially when your business feels like it is slipping through your fingers. That’s why we offer a no-obligation consultation where you can speak directly with a qualified expert. No scripts, no sales pitch. Just solid advice on what to do next.
Ready to Speak to a Licensed Insolvency Practitioner?
If you are unsure about your legal duties, worried about trading while insolvent, or just want to understand your options, speak to a professional today.
The sooner you get guidance, the more control you will have. Waiting only increases the risk to you and your business.
Contact Simple Liquidation today for a no-pressure conversation about your situation. We’re here to help, and we understand what you’re going through.