Winding Up Petition Costs: What Your Company Pays, and When Directors Pay Too

By Steven Wiseglass, Licensed Insolvency Practitioner | September 2026

A winding up petition costs your company more than the debt it’s based on. The creditor pays a £352 court fee and a £2,600 deposit to present one, plus you can expect to incur several thousand pounds in legal fees. Unless you defeat the petition, that bill ends up with your company: added to what you pay to settle, or taken from the company’s assets if it’s wound up.

How much you end up paying depends on which of four routes the petition takes:

• You settle it.
• You fight it.
• You put the company into a creditors’ voluntary liquidation first.
• The court winds the company up.

Each route is costed below, along with the one cost that lands whichever route you take: the frozen bank account.

How Much Does a Winding Up Petition Cost to Issue?

A winding up petition costs the creditor £2,952 in fixed charges before any legal fees: the £352 court fee and the £2,600 deposit, both set out on GOV.UK. The rest builds as the petition moves through four stages, and each stage changes what your company can still do.

Stage	What the creditor spends	What changes for your company
Issue (the “presentation” date)	£352 court fee, £2,600 deposit, solicitor’s drafting.	Payments from the company account can now be reversed.
Service	Process server, £100 to £150 + VAT.	You receive the petition and the hearing date.
Advertisement in The Gazette	About £80 to £120 + VAT.	Banks freeze accounts, other creditors can join, and simple withdrawal is no longer possible.
Hearing	Solicitor or barrister attending.	The court dismisses the petition, adjourns it or winds the company up.

Solicitors’ fees for a straightforward, undefended petition typically total £2,500 to £5,000 plus VAT across all stages. By the hearing, a petition over a £10,000 debt can be carrying roughly £3,000 to £5,500 in costs, and the creditor will expect your company to pay them.

The deposit is the only exception. Under article 4 of the Insolvency Proceedings (Fees) Order 2016, the creditor gets all but £50 of it back if the petition is withdrawn or dismissed. Older figures still circulate online, including the £1,600 deposit that applied until November 2022 and court fees of £302 and £332, so check the date on anything you’re relying on.

 What Does a Frozen Bank Account Cost the Business?

A frozen account is often the most expensive part of a petition, because the business can’t pay wages or suppliers while the case runs. GOV.UK says the account will be frozen when a petition is filed, and in practice many banks act as soon as they see the Gazette advert. Either way, getting access back requires a validation order.

A validation order is a court order allowing specific payments despite the petition. To get one, your company has to give the court both cash flow forecasts and a list of the payments it wants to make, with reasons for how they will help creditors as a whole. The court fee is small. The real cost is a solicitor’s time preparing the evidence. Don’t route money through another account to get round the freeze.

Suppliers and customers read the Gazette too. That knock-on effect is one of the consequences of a winding up petition that directors tend to underestimate.

Has a petition arrived, or is one being threatened? Speak to a licensed insolvency practitioner before the advert date, while the cheapest options are still open. Call us today or request a callback.

What Does it Cost to Settle a Winding Up Petition?

To settle a winding up petition, your company pays the debt plus interest and the creditor’s costs up to the day it pays. The court treats a debt paid after a petition as a debt that was owed all along, so it normally orders your company to pay those costs as well. If you think this is wrong, you have to show why.

The cheapest time to settle is ahead of the advert’s publication. Before the first hearing, the creditor can only withdraw the petition if all four of these apply:

• The petition hasn’t been advertised.
• Nobody has given notice to support or oppose it.
• Your company consents.
• The creditor applies at least five business days before the hearing.

Once the petition has been advertised, only the court can bring it to a close, by dismissing it. Another creditor can also ask the court to let it take over the petition, so paying the creditor who presented it no longer guarantees the case ends. The court then leaves that creditor’s costs until the petition itself is resolved. Our 48-hour plan for a winding up petition covers what to do in the days before the advert runs.

The same rules apply when HMRC is the creditor, and HMRC is one of the most frequent. Sending HMRC a fresh Time to Pay proposal after the petition doesn’t stop the hearing. That only happens if HMRC formally agrees and the court then deals with the petition.

Can you Settle the Petition From the Company Bank Account?

Paying the petition debt from the company bank account is risky without advice. If the company is later wound up, a liquidator takes over and reviews what it paid out after the petition was presented. Section 127 of the Insolvency Act 1986 lets the liquidator recover any payment of company money made after that date that the court hasn’t approved. The creditor you paid can end up handing the money back, which leaves the debt unpaid again.

If the company couldn’t pay all its creditors, the liquidator can also challenge the payment as a preference, because it puts one creditor ahead of the rest in the list of priorities.

Section 127 only catches company money, so a payment you make to the creditor directly from your own funds falls outside it. What matters then is how the company records that payment, because this decides whether you’ll ever get the money back.

If the company records it as a loan, it owes you the money. Should it later go into liquidation, you rank alongside the other unsecured creditors, and a liquidator can challenge any repayment you make to yourself ahead of them while it’s insolvent. If it records the payment as a gift, the company owes you nothing. If you have an overdrawn director’s loan account, the company can instead credit the payment against what you already owe it.

Tip: Agree the treatment with your accountant and write it down on the day you pay, because a liquidator will ask.

Has a petition arrived, or is one being threatened? Speak to a licensed insolvency practitioner before the advert date, while the cheapest options are still open. Call us or request a callback.

What Does it Cost to Fight a Winding Up Petition?

Fighting a winding up petition costs your company its own legal fees, commonly £2,000 to £10,000 or more depending on how far it goes. The risk runs both ways. If the debt is genuinely disputed and the court dismisses the petition, it usually orders the creditor to pay your company’s costs. If your company fights and loses, it pays both sides’ costs.

If you decide to pay a debt you still dispute, just to make the petition go away, you will need to put your position in writing when you pay. In Reliance Wholesale v AM2PM Feltham [2019] EWHC 1079 (Ch), the company paid under protest and reserved the right to recover the money. The High Court refused to treat that payment as an admission that the money was owed. The company still paid the creditor’s costs, because part of the debt was never genuinely disputed. The letter kept the costs argument open, but only a real dispute wins it.

The company needs a solicitor or barrister at the hearing, because an insolvency practitioner has no right to speak for it in court. Our job is different: we work out whether the company can realistically pay, and if it can’t, we prepare a CVL and give the court evidence of where it stands.

Can Directors be Ordered to Pay the Petition Costs Personally?

The court can order directors to pay the creditor’s costs personally, but only in exceptional cases. In Cresta Estates Ltd v MPB Developments Ltd [2025] EWHC 1291 (Ch), it did exactly that. The two directors had kept a defence going for about 20 months that they didn’t believe in, drawing salaries of £240,000 each, only to admit the company was insolvent on the first day of trial. The court found they had been defending for their own benefit and ordered them to pay the creditors’ costs, with nearly £1 million due up front.

In most cases, limited liability protects directors from company debts. It did not protect these two.

Most directors who defend a petition aren’t trying to game anything. They’re usually trying to buy time. The trouble with that is the court looks at the same facts either way, and if the company was never going to pay, every week of spurious defence is money coming out of the pot that will need covering by somebody.

Can you Still Put the Company Into a CVL, and What Will it Cost?

You can place a company into a creditors’ voluntary liquidation after a petition is presented, right up until the court makes a winding up order. Starting a CVL doesn’t stop the petition outright, though. The court still has to adjourn or dismiss it, and it will want evidence that the CVL is real, underway, and funded.

That funding point changes who pays. Paying the insolvency practitioner from the company account after the petition was presented runs into the same section 127 problem. At this stage, the CVL fee often has to come from a director or another third party, and the loan-or-gift question above applies to that money too. The creditor will usually want its costs dealt with as well. Our breakdown of What a CVL Costs covers the fee itself.

What Happens to the Costs if the Court Winds the Company Up?

If the court makes a winding up order, the creditor’s costs are paid out of the company’s assets ahead of the ordinary unsecured creditors. The Official Receiver’s administration fee also comes out of the company’s assets, and the creditor’s deposit only covers it where those assets fall short. Every pound spent on the petition and the Official Receiver is a pound that doesn’t reach the company’s other creditors.

The Official Receiver then takes control of the company and investigates how it was run. Our guide to compulsory liquidation for directors sets out what that means for you personally.

Speak to Inquesta Before the Petition is Advertised

Timing sets the cost of a winding up petition more than anything else, and the advert date is the most important milestone. Before it, the company can often settle quietly and keep its bank account open. After that, almost every option costs more and takes longer.

When you call us, make sure you have the sealed petition in front of you. We’ll ask four things first:

• when the petition was presented
• when it was served
• whether it has been advertised
• when the hearing is

Those answers will inform which routes are still open to you. That might mean settling, a CVL, or getting the petition dismissed. We’ll also tell you what each route is likely to cost before you commit to anything.

Steven Wiseglass is a licensed insolvency practitioner regulated by the Insolvency Practitioners Association. He is a member of R3 and sits on its North West regional committee, and has spent more than 20 years advising company directors. 

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