Insolvency, Banruptcy and Closure

Order of Priority (Insolvency)

The distribution of the Insolvent Company's assets must be made strictly in the following order:

  1. Creditors with Fixed Charges
  2. Administration costs of winding up, including Liquidators' fees and expenses, Official Receiver and other professional advisers
  3. Preferential Creditors:-

    (A) PAYE monies outstanding

    (B) VAT due up to six months before the Insolvency Order

    (C) Certain Social Security Contributions and payments outstanding to occupational pension schemes

    (D) Employees arrears of wages or salary due up to four months before the Bankruptcy Order to a maximum of £800

    (E) Money lent to an employer to enable it to pay debts in (D) above.

  4. Creditors with Floating Charges.
  5. Ordinary Creditors
  6. Interest on Debts
  7. Shareholders