Can an Insolvency Practitioner Submit a Deficiency Statement Instead?
Many people believe that once they hire an insolvency practitioner (IP) to close their company due to financial trouble, they no longer have to file taxes or company accounts. This is not true.
Even if your company is insolvent or going into liquidation, you are still legally required to complete and submit all outstanding tax returns and company accounts to HMRC and Companies House.
What Is a Deficiency Statement?
A deficiency statement is a document the insolvency practitioner prepares to show that your company owes more money than it owns — in other words, it’s insolvent. This helps with the liquidation process, but it does not replace your legal duty to file your company’s final tax returns or accounts.
Why You Must Still File Your Taxes and Accounts
HMRC needs the final tax returns to calculate exactly how much tax your company owes before it is closed. Without these filings, they can only estimate your tax bill, which can lead to extra fines and penalties.
Failing to file can also delay the liquidation process, cause problems with creditors, and put you as a director at risk of personal liability.
While insolvency practitioners can help you prepare and submit these documents, they cannot skip or replace this legal requirement.
What Could Happen If You Don’t File?
- HMRC might estimate your tax and charge penalties.
- Creditors could delay or contest the company’s closure.
- You could face personal legal consequences as a director.
- The insolvency process could become longer and more expensive.
How We Can Help You
At The Insolvency People, we help business owners and directors all over the UK with insolvency and tax matters. We work with trusted accountants and advisers in many major cities, including:
Glasgow, Edinburgh, Manchester, Leeds, London, Oxford, Birmingham, Liverpool, Sheffield, Bristol, Newcastle, Nottingham, Derby, Southampton, Coventry, Leicester, Cambridge, Brighton, York, Reading, Portsmouth, Milton Keynes, Stoke-on-Trent, Swansea, Cardiff, Plymouth, Bath, Cheltenham, Exeter, Gloucester, Hereford, Luton, Northampton, Peterborough, Preston, Salford, Sunderland, Warrington, Walsall, Wolverhampton, Worcester, Blackpool, Bournemouth
We also support clients in smaller towns such as:
Rochdale, Aylesbury, Stoke Mandeville, Bury, Wigan, Altrincham, Macclesfield, Telford, Halifax, Dewsbury, Barnsley, Hinckley, Cannock, Maldon, Saffron Walden, Abingdon, Cirencester, Faversham, Lichfield, Bicester, Witney, Didcot, Great Yarmouth, Haverhill, Kettering, Kidderminster, Leighton Buzzard, Liskeard, Louth, Mildenhall, Newbury, Oswestry, Redditch, Rugby, Shrewsbury, Stafford, Taunton, Thame, Truro, Uckfield, Uttoxeter, Wantage, Wareham, West Bromwich
And in villages including:
Prestbury, Alderley Edge, Clifton, Middleton Tyas, Eccleston, Culcheth, Hartfield, Haxby, Tibshelf, Wellow, Burford, Longhope, Eynsham, Great Tew, East Ilsley, Duntisbourne Rouse, Cold Aston, Shilton, Bibury, Southrop, Alfriston, Beaulieu, Castle Combe, Datchworth, Eastington, Fittleworth, Goring-on-Thames, Hambledon, Inkpen, Kelmscott, Lavenham, Minster Lovell, Nunney, Orford, Pentewan, Quenington, Rodmarton, Seend, Teffont, Uffington, Villiers, West Chiltington, Yarcombe
No matter where you are—from a big city like Manchester to a quiet village—we provide clear, local advice and support.
Why Work With Us?
We can help you:
- Prepare and file all necessary final tax returns and company accounts
- Create accurate deficiency statements to help close your company smoothly
- Negotiate with HMRC on your behalf to manage outstanding debts, including Bounce Back Loans and VAT arrears
- Explain your responsibilities as a director and protect you from personal risks
We know the challenges faced by businesses in Manchester and across the UK and are ready to guide you every step of the way.
Summary
Entering insolvency does not mean you can avoid filing taxes or accounts. The insolvency practitioner’s deficiency statement supports the liquidation but doesn’t replace your legal duties. Filing everything correctly is essential to avoid penalties, delays, and personal liability.
If you need help understanding what you must do or want expert support to close your company properly, contact The Insolvency People for a free, confidential consultation.