Insolvency licensing for accountants

Q: How might this work in practice?

Illustration only. An ICAEW member at a mid sized practice spends most of her time on corporate recovery work under a licensed partner. She wants to take her own appointments as liquidator and administrator but has no interest in personal insolvency. She passes the JIEB Corporate Insolvency paper and records more than 600 hours of qualifying experience over three years. She applies to ICAEW for a partial licence for company appointments, and the firm arranges a bond and confirms its professional indemnity cover. Once licensed she can accept appointments as liquidator of an insolvent company but cannot act as trustee in bankruptcy for the company's director. If she later passes the Personal Insolvency paper she can apply to upgrade to a full licence.

Only an individual who is authorised through a recognised professional body may act as an insolvency practitioner in Great Britain, for example as a liquidator, administrator or supervisor of a voluntary arrangement. Acting without that authorisation is a criminal offence under section 389 of the Insolvency Act 1986. In 2025 the recognised bodies were ICAEW, ICAS and the Insolvency Practitioners Association, and the Insolvency Service oversees them on behalf of the Secretary of State.

Tax investigation insurance from £108.75 a year (£9.06 a month).Pays up to £100,000 of your accountant's fees if HMRC opens an enquiry. No excess. Buy online in a few minutes.

See my price in 2 questions How the cover works Accountant? Offer cover to your clients or call 01795 841 310

Which roles need an insolvency licence?

Section 388 of the Insolvency Act 1986 defines acting as an insolvency practitioner. In relation to a company it means acting as liquidator, provisional liquidator, administrator, administrative receiver or monitor, or as nominee or supervisor of a company voluntary arrangement. In relation to an individual it covers acting as trustee in bankruptcy, interim receiver, or nominee or supervisor of an individual voluntary arrangement, and there are parallel provisions for insolvent partnerships.

Section 389 makes it an offence to act in any of those roles while not qualified, punishable by imprisonment, a fine or both. The official receiver is excluded. A general practising certificate from an accountancy body does not qualify anyone to take these appointments; see practising certificates.

Plenty of insolvency related work does not need a licence: advising directors on their options, preparing the statement of affairs for an appointed practitioner, or handling the tax position on closing a limited company. The line is crossed when the accountant takes the office holder role itself.

Who can be qualified?

Section 390 sets the conditions. Only an individual can act; a company or firm cannot. The individual must be authorised under section 390A, must have security in force for the proper performance of their functions, and must not be:

an undischarged bankrupt, or subject to a debt relief order moratorium;
subject to a director disqualification order or undertaking (see director disqualification);
subject to a bankruptcy restrictions order or debt relief restrictions order; or
lacking capacity to act within the meaning of the Mental Capacity Act 2005.

The security takes the form of a bond. Schedule 2 to the Insolvency Practitioners Regulations 2005 requires a bond in a form approved by the Secretary of State under which a surety is liable for losses caused by the practitioner’s fraud or dishonesty, or by fraud or dishonesty committed with their connivance.

Worried about an HMRC check? Tax investigation insurance pays your accountant’s fees if HMRC opens an enquiry or compliance check. Solar Protect cover pays up to £100,000 with no excess. It never pays tax, interest or penalties.

From £108.75 a year (£9.06 a month) for individuals, £117.57 for sole traders and £207.50 for companies and partnerships, including IPT and the £20 admin fee.

See my price in 2 questions or call 01795 841 310.

★★★★★ Rated 4.9 out of 5 on Trustpilot from over 160 reviews

What is the difference between full and partial authorisation?

Section 390A, inserted by the Deregulation Act 2015 with effect from 1 October 2015, distinguishes two levels:

Full authorisation: acting in relation to companies, individuals and insolvent partnerships.
Partial authorisation: acting only in relation to companies, or only in relation to individuals.

Authorisation comes from membership of a body recognised under section 391 and permission under that body’s rules. ICAEW also offers a non appointment taking licence, with a separate form for moving to an appointment taking licence, and an upgrade route from partial to full.

How does an accountant obtain an ICAEW licence?

ICAEW’s guidance says that to become a licensed insolvency practitioner you must:

pass the Joint Insolvency Examination Board (JIEB) exams: both papers for a full licence, the Corporate Insolvency paper for a company only partial licence, or the Personal Insolvency paper for an individuals only partial licence;
meet the minimum experience requirement of 600 hours over three years;
be approved as a fit and proper person by the Insolvency Licensing Committee;
hold professional indemnity insurance; and
comply with the Insolvency Licensing Regulations and Guidance Notes and accept monitoring to standards agreed with the Insolvency Service.

ICAEW says an application that does not need referral to the committee takes about 8 to 12 weeks. You do not have to be an ICAEW Chartered Accountant: non members and overseas applicants can be licensed by also becoming ICAEW affiliates. Changes to the firm’s structure must be notified within 10 business days.

How are insolvency practitioners and their regulators overseen?

Under section 391 the Secretary of State may recognise a professional body only if it regulates a profession and has rules to ensure its insolvency specialist members are fit and proper and meet acceptable requirements for education, practical training and experience. Section 391C sets the regulatory objectives the bodies must pursue, including fair treatment for people affected by practitioners’ acts, an independent and competitive profession providing high quality services at a fair and reasonable cost, maximising returns to creditors and paying them promptly, and protecting the public interest.

The Insolvency Service, which describes itself as a “regulator of regulators”, carries out that oversight. Its guidance says practitioners should receive a monitoring visit from their authorising body at least once every six years, and monitors check compliance with legislation, Statements of Insolvency Practice and the Insolvency Code of Ethics. Its 2025 annual review records the following numbers of licensed practitioners at 1 January 2026:

Body	Total licensed	Appointment takers
Insolvency Practitioners Association	637	554
ICAEW	777	655
ICAS	66	53
Total	1,480	1,262

Complaints about practitioners go through a single Complaints Gateway, whichever body licenses them. The same review reports 966 complaints received in 2025, up 47% from 656 in 2024, with 166 referred to the professional bodies. Where a body upholds a complaint it can fine the practitioner, restrict the licence or withdraw it. The Insolvency Service also has a separate investigative role into companies, covered in our page on company investigations by the Insolvency Service.

Is the regulatory model changing?

In its September 2023 response to the consultation on the future of insolvency regulation, the government decided not to create a single regulator within the Insolvency Service. Instead it said it would work with the existing bodies, legislate to regulate firms offering insolvency services (with a prohibition on unauthorised firms), create a mandatory public register of practitioners and authorised firms, and take a power to create an independent single regulator if needed. Most of these changes require primary legislation “when Parliamentary time allows”. The response also proposed raising the bond’s general penalty sum from £250,000 to £750,000 through secondary legislation.

How might this work in practice?

Illustration only. An ICAEW member at a mid sized practice spends most of her time on corporate recovery work under a licensed partner. She wants to take her own appointments as liquidator and administrator but has no interest in personal insolvency.

She passes the JIEB Corporate Insolvency paper and records more than 600 hours of qualifying experience over three years.
She applies to ICAEW for a partial licence for company appointments, and the firm arranges a bond and confirms its professional indemnity cover.
Once licensed she can accept appointments as liquidator of an insolvent company but cannot act as trustee in bankruptcy for the company’s director. If she later passes the Personal Insolvency paper she can apply to upgrade to a full licence.

What mistakes come up most often?

Agreeing to “wind up” a client’s company and drifting into acting as liquidator without a licence.
Assuming a firm can be appointed; appointments are personal to a licensed individual.
Forgetting that bankruptcy or disqualification automatically removes the qualification to act.
Not notifying changes in firm structure within the deadline.
Underestimating professional indemnity needs for appointment taking work; see professional indemnity insurance for accountants.

Solar Protect runs fee protection schemes for accountancy and bookkeeping practices. See how our accountant schemes work or read fee protection schemes for accountants.

Related Accountapedia entries

Related cover: Directors and officers insurance. Ask for a quote or call 01795 841 310.

Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.