The short answer
Putting a company into administration typically costs from £20,000 plus VAT for a small, straightforward case, and substantially more — often six figures — for larger or complex businesses. The administrator’s fees are paid out of the company’s assets as an expense of the administration, ranking ahead of unsecured creditors. Administration is a court-based rescue procedure run only by a licensed insolvency practitioner.
Administration is one of the more expensive insolvency procedures because it does the most work — it tries to rescue a trading business, sell it as a going concern, or get a better result for creditors than winding up. This guide explains what that costs in 2026, what pushes the figure up, and who ultimately pays.
Administration cost at a glance
- Small case (from) £20,000+ +VAT
- Complex / large case Often six figures
- Set by A licensed insolvency practitioner
- Paid from Company assets, as an expense
- Priority Ahead of unsecured creditors
- Approved by Creditors or a creditors’ committee
Why administration costs more than liquidation
Administration is designed to rescue, not simply close. The administrator must take control of the company, often continue trading it, protect assets, market and sell the business, and pursue one of the statutory objectives — rescuing the company as a going concern, achieving a better result for creditors than a winding up, or realising property to pay secured or preferential creditors. That breadth of work is why fees usually start well above a straightforward creditors’ voluntary liquidation.
What drives the price
- Trading on — running the business during administration adds payroll, supplier and management work.
- Size and complexity — multiple sites, contracts, leases and group structures all add cost.
- Employees — TUPE transfers and redundancy claims are administration-heavy.
- Assets to realise — property, stock and debtor books take time to sell well.
- Disputes and investigations — challenged claims and conduct enquiries extend the timetable.
| Route | Typical cost (2026) | Who pays |
|---|---|---|
| Administration — small | £20,000+ +VAT | From company assets, as an expense |
| Administration — complex | Often six figures | From company assets, as an expense |
| CVL (small) | £4,000–£6,000 +VAT | From assets; director contribution if none |
How administrators’ fees are set and paid
An administrator’s remuneration can be fixed as a percentage of assets, as a set amount, or on a time-cost basis — or a combination. Under the Insolvency Rules 2016, the basis must be approved by the creditors or a creditors’ committee, with a fee estimate provided where time costs are used. The fees, plus disbursements such as legal costs and agents’ valuations, are paid as expenses of the administration out of asset realisations, ranking ahead of ordinary unsecured creditors but behind fixed-charge holders.
The pre-pack option and its costs
A common form of administration is a pre-pack, where the sale of the business is negotiated before the administrator is appointed and completed immediately afterwards. A pre-pack can preserve value, jobs and goodwill that would evaporate in a drawn-out process, and can reduce overall cost by avoiding a long trading period. It does, however, attract extra scrutiny — particularly where the buyer is connected to the existing directors — and the administrator must be able to justify that the sale achieved the best available outcome for creditors. That justification work, and any independent evaluation of a connected-party sale, forms part of the fee.
What if there is little to pay from?
Administration is only viable where there is enough value — a saleable business, property or a secured lender willing to fund the process — to cover the costs and deliver a better outcome than liquidation. Where there is nothing meaningful to realise, an IP will usually advise that liquidation is the correct and cheaper route rather than administration. The honest test is whether the rescue value created exceeds the cost of the procedure; if it does not, paying administration-level fees makes no sense, and a straightforward winding up is both proper and cheaper. A licensed insolvency practitioner will model both before recommending a path.
Considering administration for your business?
Only a licensed insolvency practitioner can tell you whether administration fits your numbers and quote on it. A confidential call is the place to start.
Frequently asked questions
Is administration more expensive than liquidation?
Generally yes — administration involves more work (often trading on and selling a business), so fees usually start well above a standard CVL.
Who approves the administrator’s fees?
The creditors or a creditors’ committee, under the Insolvency Rules 2016, with a fee estimate where the work is charged on a time-cost basis.
Do the fees come out of my own pocket?
Normally no — administrators’ fees are paid from the company’s assets as an expense. Administration is only suitable where there is value to fund it.
Does administration include VAT?
IP fees are quoted plus VAT, with separate disbursements such as legal fees, agents’ costs and statutory advertising.
Sources & further reading
- GOV.UK — Put your company into administration
- Insolvency Act 1986 — Schedule B1 (administration)
- The Insolvency (England and Wales) Rules 2016 — remuneration of office-holders
- The Insolvency Service — guidance for company directors
- ICAEW / IPA — licensed insolvency practitioner registers
This guide is general information, not formal insolvency advice. Your situation must be assessed by a licensed insolvency practitioner before you act.