From 1 November 2022, the Official Receivers' deposit fee to be paid by petitioners initiating a creditor bankruptcy or compulsory liquidation proceeding is to increase. For creditor bankruptcy petitions, the fee will increase from £990 to £1,500 and for compulsory liquidation proceedings it will rise from £1,600 to £2,600. These increases are the first since April 2016 and are reported to have been introduced at least in part due to the relatively low level of recent insolvencies.

The deposit fee contributes to the Official Receiver's costs in administering a creditor bankruptcy or liquidation. However, if the assets realised during the bankruptcy or liquidation proceedings are sufficient to cover the Official Receiver's costs, the deposit fee is returned to the petitioner.

Despite the number of compulsory liquidations remaining below pre-pandemic levels, it is reported that a large number of outstanding cases have insufficient asset values to cover the Official Receiver's administration costs. According to the government's website, the deposit fee increase will therefore "enable the Insolvency Service to continue to administer and investigate insolvencies effectively, maximising outcomes for creditors whilst mitigating the risk of cost recovery being passed on to the taxpayer."

The low number of recent compulsory liquidations has been driven in part by government pandemic measures designed to support business, including an increase in the debt threshold for a winding-up petition to £10,000, up from the previous threshold of £750. Despite speculation that the £10,000 limit would remain, it fell away from 31 March 2022.

The increased deposit fees may therefore present a new bar to creditors in recovering low levels of corporate or personal debt (for which the debt threshold is £5,000) as the cost of recovery may in fact exceed the debt owed.

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