An insolvency practitioner is the licensed individual who takes office as liquidator, administrator, supervisor of a voluntary arrangement or trustee in bankruptcy. Their job is to collect in and realise assets, investigate what went wrong and pay creditors in the statutory order. They are paid from the assets, on a basis that creditors (or a committee) approve, and creditors can challenge fees that look excessive.

Which roles can only an insolvency practitioner fill?

Section 388 of the Insolvency Act 1986 sets out what counts as acting as an insolvency practitioner. For a company, that means acting as liquidator, provisional liquidator, administrator, administrative receiver or monitor (in a Part A1 moratorium), or as nominee or supervisor of a company voluntary arrangement. For an individual, it includes acting as trustee in bankruptcy, interim receiver, or nominee or supervisor of an individual voluntary arrangement. Acting without being qualified is a criminal offence under section 389, punishable by imprisonment, a fine or both. The official receiver is exempt.

Some roles are not on the list. A fixed charge or LPA receiver appointed over property does not need a licence (see fixed charge receivers), and nor does an adviser who helps directors before an appointment.

Who can be an insolvency practitioner?

Only an individual can act (section 390(1)), and only if authorised under section 390A. Authorisation comes through membership of a recognised professional body, and can be full (companies, individuals and insolvent partnerships) or partial (companies only, or individuals only). Under section 390(4) and (5), a person cannot act while an undischarged bankrupt, subject to a debt relief order moratorium, disqualified as a director, subject to a bankruptcy or debt relief restrictions order, or lacking mental capacity.

A practitioner must also have security in place for each appointment (section 390(3)). The Insolvency Practitioners Regulations 2005, Schedule 2, require a bond under which a surety is liable for losses caused by the practitioner’s fraud or dishonesty. The licensing route itself, including the exams and experience the professional bodies require, is covered in insolvency licensing for accountants.

Who regulates insolvency practitioners?

The Insolvency Service’s guidance explains that the Secretary of State recognises professional bodies to authorise their members. The Insolvency Service oversees those bodies and is often described as the regulator of regulators. Practitioners receive monitoring visits at least once every six years, and more often if needed. Monitors check compliance with the legislation, Statements of Insolvency Practice (SIPs) and the Insolvency Code of Ethics.

Complaints about a practitioner’s professional conduct go to their authorising body. The guidance is clear that only the court can confirm, reverse or modify a practitioner’s decisions in a case. The Secretary of State, the Insolvency Service and the professional bodies cannot.

What does an insolvency practitioner actually do in a case?

The detail depends on the procedure, but the core duties are the same.

  • Take control. Secure the assets, books and records, and in an administration, often keep the business trading.
  • Realise and distribute. Sell the assets and pay realisations in the order set by law: fixed charge holders, then the costs of the procedure, preferential and secondary preferential creditors, the prescribed part, floating charge holders and unsecured creditors, as HMRC’s policy paper on preferential status summarises.
  • Deal with claims. Admit or reject proofs of debt, giving reasons for any rejection (rule 14.7 of the Insolvency (England and Wales) Rules 2016). See claiming in an insolvency: proof of debt.
  • Report. Send creditors regular progress reports. Rule 18.3 requires these to cover progress in the period, a summary receipts and payments account, remuneration and expenses, distributions and what remains to be done.
  • Investigate. In an insolvent liquidation or an administration, send the Secretary of State a conduct report on everyone who was a director in the 3 years before the insolvency, within 3 months of the insolvency date (Company Directors Disqualification Act 1986, section 7A). Practitioners also look at transactions such as preferences and wrongful trading.

How are insolvency practitioners’ fees fixed?

Rule 18.16 entitles an administrator, liquidator or trustee to remuneration, fixed on one or more of three bases:

  • a percentage of the value of the property dealt with, or of assets realised or distributed;
  • time properly spent by the practitioner and staff (time costs); or
  • a set amount.

Different bases can apply to different tasks. If any part is to be charged on time costs (other than in a members’ voluntary liquidation), the practitioner must first give creditors a fees estimate and details of the expected expenses. In every case except a members’ voluntary liquidation, creditors must be told the work proposed before the basis is fixed.

In an administration (rule 18.18) and in a creditors’ voluntary or compulsory liquidation (rule 18.20), the creditors’ committee fixes the basis. If there is no committee or it does not act, the creditors decide through a decision procedure. Section 246ZF(2) of the Insolvency Act 1986 means the deemed consent route cannot be used for remuneration. Where an administrator has said there is nothing for unsecured creditors except through the prescribed part, the secured creditors (and the preferential creditors, if they are being paid) approve the fee basis instead.

In a compulsory liquidation, if creditors have not fixed the basis within 18 months of appointment, the liquidator is paid on the realisation and distribution scales in Schedule 11 to the Rules (rule 18.22). A practitioner who thinks the agreed fee is too low can ask creditors to increase it or apply to court (rule 18.24). Each progress report must say whether remuneration is likely to exceed the fees estimate or any approval given (rule 18.4).

How can creditors question or challenge fees?

There are two steps under the Rules.

  1. Ask for information (rule 18.9). A secured creditor, or an unsecured creditor with the support of at least 5% in value of the unsecured creditors, can make a written request about remuneration or expenses within 21 days of receiving a progress report. The practitioner must respond within 14 days, and can refuse only on limited grounds, such as excessive cost or confidentiality, giving reasons.
  2. Apply to court (rule 18.34). A secured creditor, or an unsecured creditor with the support of at least 10% in value of the unsecured creditors or the court’s permission, can apply on the grounds that remuneration or expenses are excessive or the basis is inappropriate. The application must be made within eight weeks of receiving the report that first shows the charge. Under rule 18.36, the court can reduce the fees, change the basis, or order the practitioner to repay the excess. The applicant normally bears the costs of the application.

How does this work in practice?

Illustration only. A liquidator is appointed in a creditors’ voluntary liquidation and proposes a set fee of £8,000 for statutory work plus time costs for pursuing an overdrawn director’s loan account. Before the decision, the liquidator sends creditors a fees estimate of £15,000 for the recovery work, with expected legal costs. There is no committee, so creditors vote and approve it by a majority in value.

Eighteen months later, the progress report shows £22,000 of time costs on the recovery. Rule 18.30 stops the liquidator drawing more than the £15,000 estimate without approval. The request to creditors must give the reasons, the extra work, the hourly rates and the time involved. A trade creditor holding 12% of the unsecured debt thinks the work was disproportionate. It first asks for a breakdown under rule 18.9, then, within eight weeks of the report, applies to court under rule 18.34 without needing permission.

What do directors and creditors get wrong?

  • Treating the practitioner as the directors’ adviser. Once appointed, the office holder must report on the directors’ conduct to the Secretary of State, whoever introduced them.
  • Not engaging with the fee decision. Creditors who do not prove and vote leave the fee basis to whoever does.
  • Missing the deadlines. The 21 day window for information requests and the eight week window for court challenges run from receipt of the report.
  • Complaining to the wrong body. Conduct complaints go to the practitioner’s regulator, but only the court can overturn a decision in the case.

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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.