For suppliers, landlords and lenders left short
A customer has gone bust owing you money. Here is what to do this week.
Unsecured creditors are paid last and often recover a few pence in the pound. What you can still control is whether your claim is in, whether goods you supplied come back, whether the VAT you paid on the invoice comes back, and whether the hole in your own cash flow is filled before it becomes your problem.
Free. We email you the kit and a short checklist; nothing else unless you ask.
The four things that recover money
1
Prove your debt to the office holder
The liquidator or administrator named in the Gazette notice runs the claims process, not the company. Send a proof of debt with invoices, statements and your terms of trade. A claim that is not in is not paid, however small the dividend. Quote the company number and the case number from the notice.
2
Assert retention of title today
If your terms reserve ownership until you are paid, goods still on the customer's premises may be yours. Write to the office holder at once, identifying them by invoice, description and serial or batch number. Stock is often sold within days of an administration, and an unidentifiable claim fails.
3
Reclaim the VAT you paid over
You accounted for VAT on the invoice when you raised it. VAT bad debt relief returns it once the debt is more than six months past its due date and has been written off in your VAT account. Claim it on your VAT return within four years and six months of that date. On a £60,000 invoice that is £10,000 back.
4
Re-forecast your own cash
Run your cash forecast again without the receipt, and without any repeat orders from that customer. If it shows a gap, deal with it now while your own accounts are clean: invoice finance on your remaining debtors, or asset-based lending, is far easier to arrange before your lenders see a problem.
Who is paid first
The statutory order in a liquidation or administration. Where you sit decides what you can expect back. The company page for each insolvent business on this site lists the secured lenders on its charges register.
- 1Fixed-charge holders, from the assets their charge covers (usually property, sometimes book debts).
- 2The costs and expenses of the insolvency process.
- 3Preferential creditors: employees' unpaid wages up to £800 and holiday pay, pension contributions, then HMRC for VAT, PAYE and employee NI.
- 4Floating-charge holders, after a ring-fenced "prescribed part" (up to £800,000) is set aside for unsecured creditors.
- 5Unsecured creditors, including trade suppliers and landlords, share the prescribed part and anything left.
- 6Shareholders, who in an insolvent process almost never receive anything.
Fuller guide: who gets paid first in an insolvency.
When the bad debt becomes your cash problem
A supplier that loses its largest customer is often the next notice in The Gazette. K2 arranges turnaround finance for businesses that are sound but short: invoice finance against your remaining customers, asset-based lending against stock and equipment, and refinancing that buys time to replace the lost revenue. Where the gap is structural, our partners work with you on the turnaround itself.
Check your other customers
The free company health check reads any UK company's public record for warning signs, and lets you follow it so you hear the day a notice is published.
Latest insolvency notices
Every UK corporate insolvency notice from The London Gazette, matched to Companies House and the company's last filed accounts.