There is no official price list for a voluntary liquidation. The liquidator’s fee is agreed case by case, as a percentage of realisations, on time spent or as a set amount, and it is approved by the creditors in a creditors’ voluntary liquidation (CVL) or by the shareholders in a members’ voluntary liquidation (MVL). The costs are paid out of the company’s assets ahead of almost every other claim; only in compulsory liquidation are the official receiver’s fees fixed by law.

What costs does a liquidation involve?

The bill usually has several layers:

  • Pre appointment work: advising the directors, preparing the statement of affairs and running the creditors’ decision on who should be liquidator in a CVL.
  • The liquidator’s remuneration for realising assets, dealing with creditors and employees, investigating, reporting and closing the case.
  • Expenses and disbursements: statutory advertising, insurance (the “security” an office holder must hold), agents and valuers, solicitors, storage of records and any professionals employed.
  • Tax: corporation tax on chargeable gains when assets are sold is itself an expense of the winding up; see corporation tax in liquidation.

Rule 6.42 of the Insolvency (England and Wales) Rules 2016 treats all fees, costs, charges and expenses incurred in the winding up as expenses of the winding up and sets the order in which they are paid among themselves. Costs of getting in and realising assets rank first, and the liquidator’s remuneration and corporation tax on gains come later in the list.

How is the liquidator’s fee set?

Rule 18.16 allows three bases, used alone or in combination, and different bases for different tasks:

  1. a percentage of the value of the assets realised, distributed or both;
  2. the time properly given by the liquidator and staff, charged at their rates;
  3. a set amount.

Outside an MVL, a liquidator who wants to charge on a time basis must first give creditors a fees estimate and details of expected expenses (rule 18.16(4)), and in every case other than an MVL must tell creditors what work is proposed (rule 18.16(6) and (7)). In a CVL the proposed liquidator may send this before appointment (rule 18.16(10)). Whoever fixes the fee must consider the complexity of the case, any exceptional responsibility, how effectively the liquidator is performing and the value and nature of the property (rule 18.16(9)).

The decision is made by different people depending on the procedure:

Procedure Who fixes the basis of remuneration Rule
Members’ voluntary liquidation The company in general meeting 18.19
Creditors’ voluntary liquidation The liquidation committee, or if none, the creditors by a decision procedure 18.20
Compulsory liquidation with an insolvency practitioner As for a CVL 18.20

Who pays in a creditors’ voluntary liquidation?

The company does, out of its assets. Section 115 of the Insolvency Act 1986 says all expenses properly incurred in a voluntary winding up, including the liquidator’s remuneration, are payable out of the company’s assets in priority to all other claims, after any liabilities covered by section 174A. In practice that means the costs come out of the money that would otherwise go to preferential and unsecured creditors, and they can also be met from floating charge assets under rule 6.42(2)(b).

Rule 6.7 allows the reasonable and necessary costs of preparing the statement of affairs and of seeking the creditors’ decision on the liquidator to be paid from the company’s assets, either before or after the winding up starts. If paid before, the directors must tell creditors the amount and who received it, alongside the statement of affairs, and a payment to the liquidator or an associate needs approval from the committee, the creditors or the court.

The hard case is a company with almost nothing left. If the assets will not cover the costs, the alternatives are for someone outside the company, often the directors or shareholders, to fund the work from their own resources, or for a creditor to petition for compulsory liquidation. The practitioner must still report on the directors’ conduct whoever pays; see investigations into director conduct after insolvency.

Who pays in a members’ voluntary liquidation?

Again the company, out of its own assets before anything is returned to shareholders, so in an MVL the cost is effectively borne by the members. Because the shareholders fix the fee basis in general meeting and creditors expect to be paid in full, the creditor protections around fees estimates do not apply. Members holding at least 10% of the voting rights, or any member with the court’s permission, can still apply to court if they think the fees or expenses are excessive. For the tax on what the shareholders receive, see Business Asset Disposal Relief and closing a limited company and tax.

What does a compulsory liquidation cost?

Here the fees are statutory. Schedule 1 to the Insolvency Proceedings (Fees) Order 2016, as amended from 9 January 2025, sets:

  • an official receiver’s administration fee of £6,000 on a winding up order (£13,500 where the petition was presented in the public interest under section 124A);
  • a liquidator fee of 15% of chargeable receipts while the official receiver acts as liquidator;
  • an official receiver’s general fee of £7,200 on the making of a winding up order.

The petitioner pays a deposit to the court as security for the administration fee (article 4). GOV.UK puts the petition deposit at £2,600, payable alongside court fees and the cost of advertising the petition. The deposit is returned to the petitioner except to the extent the company’s assets cannot cover the administration fee, and if the petition is withdrawn or dismissed it is repaid less a £50 administration fee. More on the process is in compulsory liquidation.

Can creditors or members challenge the fees?

Yes. Under rule 18.34, a secured creditor, an unsecured creditor with the support of at least 10% in value of unsecured creditors (or the court’s permission), or in an MVL the members described above, can apply to court on the grounds that the remuneration is excessive, the basis fixed is inappropriate or the expenses are excessive. The application must be made within 8 weeks of receiving the progress report or final account that first reports the charge.

How might the numbers look?

Illustration only. Larch Ltd enters a CVL. The directors agree a set fee of £5,000 for pre appointment work, paid from the company’s bank balance and disclosed to creditors with the statement of affairs. The creditors then approve the liquidator’s fee as 20% of realisations plus a set amount for statutory work. The liquidator sells equipment for £30,000 and collects £10,000 of debts, so £40,000 comes in. Agents’ and legal costs of £4,000 come off first, the liquidator’s percentage fee is £8,000, and the set amount and remaining expenses are paid next. Only what is left goes to preferential creditors and then unsecured creditors. If Larch had owned nothing, the directors would have needed to fund the CVL themselves or face a creditor’s winding up petition.

What mistakes come up most often?

  • Comparing quotes on the headline pre appointment fee alone, without asking what the liquidator’s fee basis will be once appointed.
  • Assuming the directors’ payment of the fee buys any say over the investigation. It does not; the liquidator acts for creditors.
  • Not disclosing a pre liquidation payment to the practitioner with the statement of affairs, as rule 6.7 requires.
  • In an MVL, distributing cash to shareholders before the liquidator has provided for costs and any final tax.
  • Choosing strike off to save the cost of a CVL when the company is insolvent; see investigations into directors of dissolved companies.

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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.