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Can't Pay Company Debt

Low-Cost Liquidation
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Stop HMRC & Creditor Pressure
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By Jonathan Munnery
16 June 2025

What happens if you cannot pay your company's debts?

If a company cannot pay its debts, several actions can be taken. Creditors can petition the court to wind up the company, leading to liquidation. Alternatively, the company can enter administration, providing protection from creditors while a solution is sought, or enter a Company Voluntary Arrangement (CVA) to restructure debts.

What are the options if a company cannot pay its debts?

When a company is struggling due to escalating debts owed to creditors such as HMRC and trade suppliers, it can be a hugely distressing time. The reality is that this situation is extremely common; particularly in the UK’s current trading environment where every sector seems to be under pressure.

Unfortunately, creditor pressure won’t just stop unless you take action. Those persistent phone calls, final demand letters, and invoice reminder emails will not go away if you put your head in the sand. And HMRC are becoming increasingly aggressive in pursuing tax arrears and taking directors to court with increased regularity. Which means the best time to take action is now – before the insolvent position of your company worsens, and possibly starts to affect you personally.

Understanding your duties as a director of an insolvent company 

At UK Liquidators, we help hundreds of company directors just like you by putting a stop to creditor pressure and protecting your business from incurring further debt. As the director of an insolvent limited company, you have certain duties and responsibilities which you must adhere to. One of these is to place your creditors’ interests above those of yourself and any other directors/shareholders, meaning you must not do anything to worsen their position or expose them to further losses. This may require you to cease trading immediately in order to prevent the company’s financial position declining further, however, in some cases you may be able to continue to operate – at least in the short-term – if it is deemed that this action could have a material benefit to outstanding creditors. By taking the earliest possible action and contacting us, we can quickly ascertain whether liquidation is the right course of action or if a restructuring and turnaround process is realistically achievable.

Concerned about the National Insurance increase?

For the 2024-25 tax year, the rate of employer National Insurance increases from 13.8% to 15% adding yet more pressure onto already squeezed cash flows. If you are worried about the impact this could have on your company’s finances, talk to the experts at UK Liquidators. As licensed insolvency practitioners we can explain your options and help you plot a way forward. Call today on 0800 063 9262.

If your company is insolvent with no realistic prospect of things improving, liquidation may be the most appropriate next step. As you and your company are separate legal entities you will not be expected to pay your company’s debts should there be insufficient funds within the business to settle these, unless you have provided a personal guarantee.

Are any of these debts familiar?

  • Corporation Tax
  • VAT Arrears
  • PAYE Arrears
  • Trade Creditors
  • Bank and Credit Card Loans
  • Business Rates
  • Utility Bills
  • Vehicle Leasing
  • HMRC Fines and Penalties
  • Lease / Landlord Arrears

If any of these debts strike a chord with you and you’re concerned about these liabilities escalating, liquidation may be the best route forward before matters get worse. Remember, directors are legally obliged to stop trading if, by doing so, they are worsening the position of the company’s creditors.

Start your online liquidation today

If you have decided liquidation is the right option for your limited company, you can take the first step and begin the process online using our online portal. Starting the process is quick, simple, and can be done at a time that suits you. Your information will be submitted to your local UK Liquidators insolvency practitioner who will be with you every step of the way. Click here to start your company’s liquidation online.

Our objective is to close your company in the most efficient and effective way possible – we can quickly free you of the stresses and strains which directors carry with them not only at work but also at home. We see the same emotions time and time again – tired of being chased for payment by creditors, tired of letters falling on their doormat, tired from sleepless nights – and generally just worried sick about the future. We can help.

You are not alone in your current circumstances. The first thing to do is either call us on 0800 063 9262 or take our 60 Second Liquidation Test. Our compassionate and highly experienced insolvency advisors do not judge and our process is 100% confidential; in many cases we can start the liquidation proceedings immediately.

We are proud to set the standard across the director advice sector with fully licensed insolvency practitioners working across more than 100 UK offices handling more corporate insolvency appointments than any other firm.

It’s time to take expert advice from UK Liquidators.

Jonathan Munnery
Insolvency & Restructuring Expert
Is Liquidation the best option for you?

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Contact the UK Liquidators Team

If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.

  • Free initial consultation
  • Strictly confidential
  • Fully licensed insolvency practitioners
  • Local office support
  • Named case handler throughout
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