Unfortunately, redundancy is an inevitable aspect of a company entering into an insolvency process.  This article aims to clarify the four main claims employees can make against the company, most if not all will be paid by a government department called the Redundancy Payments Service (“RPS”)

The claim to the RPS is completed online and the insolvency practitioner acting in relation to the company will provide details on how to apply, what information the employees will require, and a case reference number.  In a recent change to the process, this code cannot be obtained by the insolvency practitioner until after the company enters into the insolvency process and this may be up to three weeks after being made redundant.

All claims paid by the RPS are subject to a weekly limit which changes every 6 April.  The current limit which runs until 5 April 2024 is £643.00. 

Wages – Arrears of Pay

An employee can claim up to 8 weeks arrears of pay, based on their weekly salary rate, subject to the weekly limit referred to above.  If an employee is owed more than 8 weeks, the best 8 weeks can be chosen.  Tax and national insurance will be deducted before the payment is made.

Holiday Pay

An employee can claim for holiday pay taken but not paid and accrued holiday which has not been taken.  For the purposes of these calculations, an employee’s holiday entitlement (including bank holidays) is taken to have accrued evenly since the start of the holiday year. 

For example if an employee who had 20 days holiday plus bank holidays was made redundant after three months of their holiday year, they would have accrued a quarter of the 28 days (i.e. 7).  If the employee had taken less days than this (including bank holidays) they would be able to make a claim for the remainder.  Should the employee have taken more, it is unlikely they will be made to repay the difference.

Holiday pay claims can be for a maximum of 6 weeks, again capped at the weekly limit and tax and national insurance is deducted.

Redundancy Pay

An employee can claim for redundancy if they have worked for the Company for more than 2 years. The amount that can be claimed depends on the employee’s length of service and age.

  • Each complete year aged 18 – 22 equals half a week’s wage per year.
  • Each complete year aged 22 – 41 equals 1 week’s wage per year.
  • Each complete year aged over 41 equals 1.5 week’s wage per year.

Again the employee’s wage is capped at the weekly limit but here unlike wages and holiday pay, this is paid tax-free.

Pay in Lieu of Notice.

If a company which was continuing to trade were to make certain employees redundant, the company would be required by law to give the relevant employees notice of their redundancy and pay the employee their weekly wage during this period.  It is likely that in an insolvency process this notice will not be given and therefore the employee can claim for the wages they would have received.

The statutory notice period is one week per years’ service (from a minimum service of 1 month) up to a maximum of 12 weeks.

Employees should note that this claim is a compensation claim and is based on what happens during the employee’s notice period.  At the end of the relevant period, the employee will be invited by the RPS to complete a further online form detailing their earnings (or more importantly their potential earnings) in the period.  Therefore, if the employee starts a new job during their notice period, this income will reduce their claim.  Furthermore, all employees who are made redundant are likely to be entitled to benefits including job seekers allowance.  The RPS will deduct these benefits from this claim even if they are not claimed so our advice to any employee in this situation is to claim as soon as possible.

It is important to note that this article refers to the claim an employee can make against the RPS.  This is the most likely method for being paid and certainly the quickest.  Where an employee is paid more than the weekly limit or has extra entitlements above the statutory limits referred to above in their contract, they will have surplus claims which can still be made against the company in liquidation.  However, here, payment is dependent upon realisations in the liquidation and will therefore be uncertain.

The published guidance from RPS is they aim to pay the claims within six weeks so if this delay will result in financial pressure for you our advice is to contact your creditors and explain you have been made redundant.

If any employee who has been made redundant has any queries regarding the above they should contact PBC Business Recovery & Insolvency on 01604 212150 (Northampton),  01908 488653 (Milton Keynes) or email to enquiries@pbcbusinessrecovery.co.uk.  Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

How confident are you?

Settlement Agreement

As is typical of the media, they regularly report UK insolvency figures and how they appear to be rising.  However, there are two things that are not mentioned in their reporting.  The first is putting insolvency figures into perspective, by comparing corporate insolvencies with the number of active businesses in the UK.  The second statistic that never gets reported is the number of solvent liquidations.

A solvent (or a members’ voluntary liquidation) is a tax-led winding up of a company where there will be a return paid to shareholders.  It could be the company was a single-purpose vehicle or, simply a successful business that is being brought to an end due to the retirement of its owners.

The first thought must be that it is a real positive as business owners can retire, having paid all of the company creditors and they are the beneficiary of funds to assist (or facilitate) retirement.  However, on the other side of the coin, you could argue these are the people who have a proven record of having a good business acumen; a skill we are losing.

In some recent research, it was suggested 23% of business owners have hastened their plans to wind down or sell.  The report suggests the expediting of activity has come from an uncertainty on where the UK economy is heading.  That uncertainty covers many areas, but is primarily the legacy of Brexit, COVID-19 pandemic and the threat of a government change, where changes in policy and taxation are a real threat.

Confidence is often dismissed as a business quality and there can be no doubt business confidence has taken a beating over these past three years.  However, before you launch into a solvent winding up you should plan ahead, both in terms of how best to wind down the affairs of your company (whether that is a sale, succession planning or closure) and your own personal tax position.

At PBC we are seeing an increasing number of solvent liquidations where we will assist the directors and their advisors to ensure the winding down is completed in the most cost-efficient manner.

If you require any advice or assistance on mediation or any other insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss and advise on your situation on 01604 212150 or email to enquiries@pbcbusinessrecovery.co.uk.  Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Has your business been interrupted?


How badly was your business hit by the impact of COVID-19 and the resulting Government (lockdown) measures?

We suppose the correct question ought to be, “What have you done to address the impact on your business?”  Many sought to claim under their business interruption insurance policy, only to have their claim rejected as a pandemic was not specifically covered or their policy was simply inadequate in its wording.

It has been over two years (15 January 2021) since the Supreme Court ruled in favour of the policy holders in a test case.  Since then, according to the Financial Conduct Authority, almost 38,000 policy holders have received an interim payment, at least, totalling some £1.4 billion.

Naturally any claim will turn on the wording within your policy and information suggests there are cases still finding court intervention is required and, no doubt, insurers will continue to seek avenues for denying liability albeit, in a recently reported case, the court ruled again in favour of the policy holder.

At PBC we have successfully claimed a business interruption pay out in an insolvent liquidation.  In another case, having followed our advice to appeal against the initial rejection a company’s fortunes were turned around from insolvency (with the resulting closure) to one of being solvent, while also allowing the shareholders to sell the business as a going concern.

In short, where your insurance policy includes business interruption, revisit the policy and, where in doubt, seek independent advice as you may find you are eligible to recover some of those losses suffered.

If you require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss and advise on your situation on 01604 212150 (Northampton 01908 488653 (Milton Keynes) or email to enquiries@pbcbusinessrecovery.co.uk.  Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Lies, damn lies and……

Lies, damn lies and……

At this point we are guessing readers are finishing off the above quote.

On 14 December 2022 the Insolvency Service released the November statistics for corporate and personal insolvency and there are some messages that derive from the core numbers reported.

November 2022 saw 2,029 recorded corporate insolvencies.  This was a 35% increase on November 2019 (i.e., pre-pandemic figures) and includes:


  November 2022 Compare with pre-pandemic
Creditor voluntary liquidations 1,595 50% increase
Winding up by the Court 290 7% increase
Administrations 134 11% decrease
Company voluntary arrangements 10 52% decrease


The key messages appear to include:

  • The fallout from the pandemic is starting to take effect.
  • Since the introduction of secondary preferential status for a majority of the debt owed to HMRC, restructuring a company has become less viable.
  • Creditors are starting to enforce debts by way of winding up petitions, particularly HMRC and one main clearing bank.

However, personal insolvency appears to be taking a totally opposite approach.  While individual voluntary arrangement (“IVA”) numbers are difficult to track (they are only recorded once the insolvency practitioner registers it with Insolvency Service) they are averaging 7,801 new IVA per month.  This compares favourably with bankruptcies, which only numbered 546 in November, a 60% fall when compared with pre-pandemic figures.

With personal insolvency, our conclusion is that people are recognising their financial challenges early and are acting likewise.  In doing so, there is a better chance of reaching a compromise with their creditors.  Equally there also appears to be a level of understanding from creditors, who accept the likely outcome from an IVA will be significantly better than that in bankruptcy.

No matter what the statistics say, the consistent message is always that when directors of a company or individuals alike recognise they have financial difficulties, taking early advice will usually mean more options are open to you.

If you require any advice or assistance on any insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss and advise on your situation on 01604 212150 or email to enquiries@pbcbusinessrecovery.co.uk.  Alternatively, visit www.pbcbusinessrecovery.co.uk for further information.

Bounce-back loan misconceptions


It seems that every other press release from the Insolvency Service at the moment announces more sanctions against individuals who have abused the Covid support schemes and in particular the Bounce-Back Loan scheme (“BBL”).  For example the latest included a director who applied for a BBL with three different lenders far exceeding the amount he was entitled to and an individual who spent £13,000 of the loan he received on various gambling sites.


One common misconception around BBLs is the position of personal liability.  It is true to say there is no personal liability for directors should the business fail, and the loan is not repaid.  However, something we are seeing at PBC is where the funds received from the BBL have been paid to the director, thereby creating a loan between the company and the director.  This loan is repayable.


If a director is concerned they may not be able to meet the BBL repayments, or if that has already occurred, directors should be aware this could constitute evidence of the company’s insolvency as it is not able to meet its debts as they fall due.  Upon reaching this point, the director’s legal duties switch from the shareholders to protection of the creditors as a whole.  It is at this point, at least, PBC recommend seeking advice.  Directors should not be wary about seeking advice (particularly if they have an adverse loan) as failing to do so may lead to the position becoming worse should liquidation occur at a later stage, as well as leaving them vulnerable to stepping on the “elephant traps” as we have previously mentioned here – https://www.pbcbusinessrecovery.co.uk/beware-the-elephant-traps/ .


Should you or your business have an issue with repaying a BBL (or for any other reason) then please contact a member of the Team at PBC Business Recovery & Insolvency on (01604) 212150 (Northampton office) or (01234) 834886 (Bedford office). Alternatively, you may send an email to info@pbcbusinessrecovery.co.uk or access our website at www.pbcbusinessrecovery.co.uk


What is a company CCJ?

What is a company CCJ


A county court judgment (“CCJ”) is a court order used to try and force a company to pay a business debt. The creditor can make an application for a CCJ once they have tried and failed with alternative methods of debt collection. The issuing of a CCJ can be a sign that the company in receipt of the CCJ, may be having financial problems and is struggling to pay its debts as and when they fall due but, more commonly, a CCJ is received because the claim has been disputed or the recipient disagrees with the sum being claimed.


Once a CCJ has been registered it is available in the public domain and, unfortunately, this is when “Ambulance Chasing” insolvency firms or their subcontracted sales teams look to make direct contact with the directors of the company offering them their services to assist and help. The contact is generally in the form of numerous unsolicited phone calls or even direct letters to the company, mentioning the CCJ. Clearly, these phone calls and letters can be intercepted by employees of the company, unaware that financial issues may be on the horizon, which can also have a damaging effect on the company.


If you or one of your clients receive a CCJ and it is a result of real financial pressures, then I am afraid you/they will be “Ambulanced Chased”. Here at PBC Business Recovery and Insolvency we would never hound the company directly, and we would recommend that the director(s) take immediate advice. The company’s professional advisors will no doubt know and trust an insolvency firm to provide the right advice for their client and not “fuel for the Ambulance”.


Should you have an insolvency-related issue then please contact a member of the highly experienced team at PBC Business Recovery & Insolvency who will be more than willing to provide you with guidance and advice that will be right for you and your circumstances – (Northampton office – (01604) 212150) or (Bedford office – (01234) 834886) .


Who owns future sales?


Who owns future sales?


Occasionally there are sound commercial reasons for taking the business from an existing insolvent company and moving it into a new entity (commonly referred to as “Phoenix liquidation”).   When this occurs, the most common feature surrounds completion of existing orders and can future orders be passed directly to the new company?

Directors are under statutory duties that include protecting the company assets.  However, when a company ceases to trade, due to insolvency, the obvious argument is that the company is unable to fulfil orders, both those in progress and new orders.

In general, completing existing orders through a new company without providing some value back to the old company could constitute a breach of duty.

A defence to such a breach is often the director is the business and without the director there was no business in the first instance.  In many cases this argument fails, both in company law and because the law considers title in the property (orders) rests with the company.  New orders that were secured by the company are considered likewise.

However, the court of appeal ruled in Reynolds -v- Caroline Stanbury [2021] EWHC 2506(Ch) that putting future sales opportunities through an alternative business did not amount to an unlawful removal of business.  The sales opportunities were not pre-existing corporate assets.

As with all law reports, the Reynolds case was decided based on the surrounding facts, unique to that case.  The respondent was a professional personal shopper for the seriously wealthy and was, for all intents and purposes a sole trader.  Even a key witness (a customer) believed the respondent traded as a sole trader and was completely unaware the company existed.

Whenever a company needs to cease trading, the question of existing/ongoing orders is discussed regularly, particularly when there is a potential for the business to continue under a new entity.  In every case the directors need to consider their statutory duties and before transferring orders, seek independent advice.

Should you have an insolvency-related issue then please contact a member of the team at PBC Business Recovery & Insolvency on (01604) 212150 (Northampton office) or (01234) 834886 (Bedford office). Alternatively, you may access our website at www.pbcbusinessrecovery.co.uk.

Winding-up petitions – back to normal!

Signing a contract

The restrictions implemented by the Corporate Insolvency and Governance Act 2020 in March 2020 on the issuing of statutory demands and winding-up petitions has now fully come to an end as from 1 April 2022.

Creditors are now free to issue winding-up petitions against companies who are unable to pay sums owed with monetary petition limit back to £750 instead of £10,000.

It is expected that there will be a substantial number of winding-up petitions going forward with creditors seeking to recover funds owed.

If you or a client have received a winding-up petition or are being threatened with the serving of a winding-up petition, then please contact a member of the Team at PBC Business Recovery & Insolvency on (01604) 212150 (Northampton office) or (01234) 834886 (Bedford office).

Welcome Ian Cooke


PBC Business Recovery & Insolvency are delighted to announce that Ian Cooke has joined the already highly experienced team and will be based in the Northampton office.

Ian, himself, has over 29 years’ experience and is very well known in the business community of Northamptonshire, having spent the past 22 years at another local practice.

Managing Director, Gary Pettit said,
“Ian is a fantastic addition to the PBC Team and his arrival is indicative of our commitment to provide the business community and advisors with the best service available.” On joining, Ian said,

“I am really looking forward to joining the PBC Team and working with Gary again after some 12 years. Whilst the insolvency profession widely anticipates that corporate insolvency numbers will rise as a result of the Pandemic, I would urge early advice is sought from PBC to discuss all available options. The potential recovery of an insolvent business has always been at the forefront of my mind when advising and I know this is also PBC’s ethos – to always first try and avoid those we advise being included in insolvency statistics going forward”

Should you have an insolvency-related issue then contact Ian at PBC Business Recovery & Insolvency on (01604) 212150 (Northampton office) or (01234) 834886 (Bedford office). Alternatively, you may send an email to iancooke@pbcbusinessrecovery.co.uk or access our website at https://lnkd.in/ehKHz4K