Chris is an Insolvency Practitioner regulated by the ICAEW since 2014,.
He is experienced in contentious insolvency with excellent analytical skills and strong knowledge of both general and technical insolvency matters.
An HMRC letter demanding immediate payment has just landed. Cash in the bank barely covers payroll, and a key supplier is threatening to stop deliveries by Friday. Before making panic decisions, it is worth speaking to a free, government-backed advice service.
The Business Support Helpline on 0800 998 1098 or MoneyHelper’s online Debt Advice Locator can explain your options at no cost and help you understand the next legal steps if insolvency becomes a risk. That early conversation often gives you clarity and time to decide on the right course of action.
Free business debt advice allows you to discuss your company’s financial position with an impartial adviser without paying for the initial guidance. However, if the outcome involves a formal insolvency process or professional representation, fees will usually apply. Understanding this distinction avoids confusion later.
In practice, “free” usually means information, guidance, and signposting rather than hands-on action. Government-backed helplines, the Insolvency Service enquiry line, and debt-advice charities can explain budgeting options, creditor communication, and directors’ duties when a company becomes insolvent. They can outline procedures such as Company Voluntary Arrangements or liquidation, but they do not act on your behalf or submit formal applications.
If a formal insolvency procedure becomes necessary, a licensed insolvency practitioner (IP) must be appointed. Many IP firms offer an initial discussion at no charge, but professional fees apply once formal work begins.
What typically costs nothing
Phone or online support from official business helplines
Online tools and signposting from MoneyHelper or Citizens Advice
Initial overview discussions about available options
What normally attracts fees
Proposing or supervising a CVA, administration, or liquidation
Court applications and statutory notices
Ongoing supervision of formal repayment arrangements
Tailored legal or accounting advice beyond general guidance
Using free channels first helps you understand whether recovery is realistic before committing to professional costs.
Why Acting Early Protects Both Your Company and You
Directors should seek advice as soon as they suspect the company may not be able to pay its debts when they fall due. At that point, directors must consider the interests of creditors and take steps to minimise potential losses. Delaying action increases risk, particularly if losses to creditors worsen.
Under section 214 of the Insolvency Act 1986, courts can order directors to contribute to company assets if they continue trading when they knew, or ought to have known, there was no reasonable prospect of avoiding insolvent liquidation. Directors may also face disqualification proceedings if conduct falls below required standards.
Key Threats Once Insolvency Looms
Wrongful trading: Continuing to trade when there is no reasonable prospect of avoiding insolvency.
Personal contribution orders: Courts can require directors to compensate the company where losses increase due to wrongful trading.
Compulsory liquidation: A creditor can petition the court to wind up the company, after which control passes to the Official Receiver or an appointed liquidator.
Early advice helps directors understand whether trading can safely continue, whether negotiations are realistic, or whether formal insolvency procedures should be considered.
Official UK Helplines and Online Services You Can Use Today
If cash is tight, speaking to a free advice service is often the safest first step. These services provide information and guidance but do not replace professional insolvency advice where formal action is required.
*See GOV.UK pages for call charge information where applicable.
What each channel can (and cannot) do
Business Support Helpline: Provides general business guidance and signposts relevant services.
Growth Hubs: Offer regional support and business advice; they do not carry out insolvency work.
Business Support Scotland / Business Wales / Invest NI: Provide regional business guidance and referrals where specialist help is needed.
Insolvency Service enquiry line: Explains processes and director responsibilities but does not recommend specific options.
MoneyHelper Locator: Helps you find free debt advice providers; it does not give advice directly.
Citizens Advice: Offers confidential guidance and budgeting support.
If unsure where to begin, start with the Business Support Helpline and ask to be directed appropriately.
If HMRC Is Your Main Creditor: How to Use a Time-to-Pay Arrangement
If tax arrears are the main issue, contacting HMRC early is important. HMRC may agree a Time-to-Pay (TTP) arrangement where a business cannot pay immediately but can clear the debt over time.
A TTP arrangement can prevent escalation while payments are maintained. Depending on the tax and circumstances, late payment penalties may stop accruing from the relevant point once an arrangement is agreed, but statutory interest normally continues until the balance is cleared.
Typical steps include:
Confirm affordability – HMRC will consider whether the business is viable and able to meet future tax obligations.
Contact HMRC promptly – Use the number shown on the demand or the Payment Support Service listed on GOV.UK.
Prepare financial information – HMRC may ask about income, expenses, assets, and cash-flow forecasts.
Agree a payment proposal – HMRC may accept or adjust proposed instalments.
Maintain payments – Missing payments can lead to cancellation of the arrangement and renewed enforcement action.
Have this ready before calling HMRC
VAT number or UTR
Amount outstanding and due dates
Cash-flow forecast
Details of income and essential costs
Bank details for payment setup
Engaging early generally improves the chances of agreement and reduces the risk of escalation.
When Free Guidance Isn’t Enough: Knowing When to Call a Licensed Insolvency Practitioner
Free advice is useful at the early stage, but certain triggers usually require professional involvement.
Warning signs that it is time to seek insolvency advice:
Receipt of a statutory demand
Threatened or issued winding-up petition
Cash-flow forecasts showing no realistic return to solvency
Persistent inability to meet tax or supplier obligations
Creditors moving accounts to stop or pro-forma terms
A licensed insolvency practitioner can advise on formal options and explain legal consequences before any appointment is made.
Formal option
What it does
When it fits
Company Voluntary Arrangement (CVA)
Allows repayment of debts over time while trading continues
Business viable but overburdened by debt
Administration
Provides legal protection while rescue or sale is explored
Severe creditor pressure or asset protection required
Creditors’ Voluntary Liquidation (CVL)
Formal closure and asset realisation
No realistic recovery prospect
Fees depend on company size and complexity and should be agreed in writing before appointment.
Regional Differences in Scotland, Wales and Northern Ireland
Insolvency law across the UK largely follows the Insolvency Act 1986, but administration and support structures differ.
Scotland: The Accountant in Bankruptcy (AiB) performs certain supervisory and administrative functions and maintains the Register of Insolvencies, alongside court and practitioner roles.
Wales: Insolvency rules mirror England, but Business Wales provides devolved business support and guidance.
Northern Ireland: Insolvency processes operate through Northern Ireland courts with separate guidance published through nibusinessinfo.
If unsure, contact the relevant regional business support service first.
What to Gather Before Picking Up the Phone
Having accurate figures ready helps advisers give meaningful guidance quickly. Prepare:
A recent cash-flow forecast
List of creditors and balances owed
HMRC reference numbers
Recent bank statements
Expected income over the next quarter
Clear information allows advisers to explain realistic options rather than general theory.
Avoiding Scams and Unregulated ‘Debt Specialists’
Not all firms advertising debt help are regulated. Checking credentials before sharing information protects both the company and its directors.
Common warning signs
Promises to “write off all debt” without assessing circumstances
Upfront fees before advice is provided
No FCA authorisation for debt counselling or no insolvency licence where insolvency work is offered
Basic checks
Search the FCA Register for authorised debt advice firms.
Use GOV.UK’s “Find an insolvency practitioner” service to confirm licensing status.
Contact firms using details listed on official registers rather than advertisements.
Licensed advisers must follow regulatory and data-protection requirements.
At-a-Glance: Which Service to Contact First
Debt trigger
Best free first step
If still unresolved
HMRC arrears
HMRC Payment Support Service
Insolvency practitioner if insolvency risk arises
Supplier demands
Business Support Helpline
Solicitor or IP for formal negotiations
Statutory demand received
Insolvency Service enquiry line for process explanation
Professional insolvency advice
Cash-flow problems
MoneyHelper Debt Advice Locator
Accountant or IP for detailed planning
FAQs
1) Is business debt advice confidential?
Yes. Government-backed helplines and regulated advisers must keep information confidential under data-protection and professional rules. They will not contact creditors without your permission.
2) Does speaking to HMRC trigger enforcement?
No. Contacting HMRC usually demonstrates engagement and can help prevent escalation while payment options are discussed.
3) Can I get free advice if my company is already in liquidation?
Yes. The Insolvency Service and advice organisations can explain processes and director responsibilities, although they cannot replace the liquidator’s role.
4) What documents will advisers ask for?
Typically bank statements, creditor lists, cash-flow forecasts, and HMRC balances to assess solvency and affordability.
5) Are personal guarantees covered by free advice?
General guidance may be provided, but detailed legal advice on guarantees may require specialist legal or regulated debt advice.
6) Can charities advise on company debts?
Many charities focus on personal debt, but some provide guidance for sole traders or small businesses. MoneyHelper’s locator helps identify suitable providers.
7) How long does it take to set up a Time-to-Pay plan?
Timeframes vary depending on complexity and HMRC review requirements. Interest normally continues until the debt is cleared.
8) Do I need my accountant on the call?
No. Directors can speak directly to advisers, although an accountant may help where finances are complex.
9) What happens if I ignore a statutory demand?
A creditor may present a winding-up petition after 21 days. Companies normally respond by paying, negotiating, disputing the debt, or applying to court to prevent a petition being presented.
10) Is there free support for start-ups with debt?
Yes. Growth Hubs and regional business support services provide guidance regardless of business age.
11) Does free advice cover bounce-back loans?
Yes. Advisers can explain repayment options and consequences of arrears, although formal restructuring or insolvency advice may require professional involvement.
12) Are advice lines open in the evening?
Hours vary by service. Many provide weekday support, while online tools such as MoneyHelper are available at any time.
13) Will a free adviser inform my bank?
No. Advice discussions remain confidential unless you ask the adviser to act on your behalf.
Take This Next Step Today
If your business is under pressure, speaking to a free advice service is a sensible first move. A short conversation can clarify your options, explain legal responsibilities, and help you decide whether informal negotiation or formal insolvency advice is required.
Taking advice early does not commit you to any course of action — but it does ensure decisions are made with full information rather than under pressure.
