Customer in Administration: How to Recover Unpaid Invoices (UK 2026)

It becomes an unsecured debt against the estate. You register with the appointed administrator as an unsecured creditor and submit a proof of debt. Distributions to unsecured creditors are paid after secured creditors (banks with debentures), preferential creditors (HMRC for PAYE/NIC up to 12 months), and administration costs. Typical recovery is 0-30p in the pound, paid 12-36 months later.

Within hours. (1) Stop all further credit and pause any work-in-progress. (2) Identify any goods supplied with retention of title and email the administrator within 14 days to claim them back. (3) Check the first creditors' notice for the proof of debt deadline (usually 21 days). (4) If you have trade credit insurance, notify the insurer within their notification window (often 30 days). (5) Search Companies House for the administrator's name and contact details.

Yes. Under HMRC's bad debt relief, you can claim VAT back on the unpaid portion 6 months after the invoice due date. You don't have to wait for the administration to conclude. Claim via your VAT return (box 4). Keep evidence of the unpaid debt. If you later receive a partial distribution from the administrator, you must repay the corresponding VAT.

Only if you sold the specific invoice to a non-recourse provider before the administration filing date. Non-recourse spot factoring (Hydr, Kriya for credit-approved debtors) means the factor absorbs the loss. With recourse factoring (Bibby standard, most whole-book), the factor will demand the cash back from you. With invoice discounting, you remain on the hook for the full debt. Always confirm whether your facility is recourse or non-recourse.

Yes for businesses with concentrated debtor risk (one customer over 20% of turnover) or sectors with high failure rates (construction, retail, hospitality). Premium typically 0.1% to 0.4% of insured turnover. Major UK underwriters: Atradius, Allianz Trade (formerly Euler Hermes), Coface, Tokio Marine HCC, Nexus. Pays out 70-90% of insured value within 60-90 days of customer insolvency. Many invoice finance providers bundle credit insurance into their facility.

A Company Voluntary Arrangement (CVA) is a binding repayment plan agreed with creditors. You'll receive a CVA proposal document setting out what unsecured creditors will be paid (typically 25-40p in the pound over 3-5 years) and asked to vote. The CVA passes if 75% by value of voting creditors approve. Once approved, you cannot pursue the original debt and must accept the CVA terms. If you suspect the CVA understates assets or favours connected creditors, raise it with the supervisor before the vote.