UK: Petition Deposit Increases From 1 November 2022

As with everything these days, the up front cost of issuing either a winding-up or bankruptcy petition have significantly increased.

As from 1 November 2022, the "Petition Deposit" payable by a creditor to the Court on issuing a winding-up or bankruptcy petition, to cover the Official Receiver's fees to administer a company liquidation or bankruptcy estate, has increased as below:

However, the petition deposit payable by a debtor petitioning for their own bankruptcy remains unchanged at £550.

The justification for the increase in Petition Deposits given by the Insolvency Service is that insolvency case numbers are at an historically low level, with many ongoing cases having low or insufficient realisable assets to recover the Official Receiver's costs of administering a company liquidation or bankruptcy estate.

Going forward, the Government anticipates that the Petition Deposit increases will "enable the Insolvency Service to continue to administer and investigate insolvencies effectively, maximising outcomes for creditors whilst mitigating the risk of cost recovery being passed on to the taxpayer".

Importantly, there is no change to the provisions concerning the return or refund of a Petition Deposit as per Section 4 in The Insolvency Proceedings (Fees) Order 2016. Where a winding-up or bankruptcy order has been made, the Petition Deposit will be repaid to the petitioning creditor, subject to sufficient assets having been realised to repay the same.

Otherwise, where a petition is withdrawn or dismissed by the Court, the Petition Deposit will be refunded to the petitioner, less an administration fee of £50.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.