The UK insolvency practitioner market in 2026

Where the market stands past the peak, how a service-dominated economy has rewired the IP business model, and why directors' loan accounts have become the estate's principal asset. Written for general practice accountants — whose clients feel these currents first, and who are usually the first adviser in the room when they do.

1. The state of the market: past the peak, on a high plateau

2025 closed with 23,942 company insolvencies in England and Wales — the second-highest annual total on record, behind only 2023. 2026 has eased rather than turned: July 2026 saw 1,931 company insolvencies, 5% below July 2025, and monthly volumes this year are running about 6% below the average of the preceding three years. The 12-month insolvency rate is 50.3 per 10,000 active companies (roughly one in 199), down from 52.5 a year earlier but still far above the ultra-low rates of 2015–2019 — though nowhere near the 113 per 10,000 peak of the 2008–09 recession.

The composition of that caseload matters more than the total. Creditors' voluntary liquidations account for 78% of all company insolvencies — 1,497 of July's 1,931 cases. Administrations (124 in July, down 19% year on year) and CVAs (22, albeit up 83% from a low base) remain a small minority. In other words, the modern UK insolvency market is overwhelmingly a market in the burial of small, often asset-light companies, not the rescue of larger ones.

Sector concentration is familiar: construction (17% of the last twelve months' failures), wholesale and retail (15%) and hospitality (14%) lead, with April 2025's employer NIC and minimum wage increases still working through labour-intensive sectors. Compulsory liquidations remain elevated by historic standards, with HMRC widely regarded as the most active petitioner as it works through a tax-debt mountain that commentators put at over £40 billion.

2. The hyper-service economy and the IP business model

The long shift from manufacturing to services has quietly transformed what an insolvency actually contains. The typical failed company today is a labour-based service business: no factory, no plant and machinery, no freehold, often no stock — a laptop, some debtors, and liabilities to HMRC, a Bounce Back Loan and trade creditors. Three consequences follow.

Realisations have moved from assets to claims

Where a 1990s liquidation funded itself from asset sales, today's CVL estate typically consists of book debts, an overdrawn director's loan account, and potential antecedent-transaction or misfeasance claims. The IP's recovery skill-set is now closer to forensic accounting and litigation management than auctioneering — which is precisely why litigation funders have become structural players in the market (see §4).

Fees have been commoditised at the volume end

Because most service-company CVLs are small and broadly similar, fixed-fee and heavily marketed “online liquidation” models have driven headline pricing down, and search engines — increasingly, AI assistants — have made pricing transparent to directors before they ever ring their accountant. Fee recovery in low-asset cases remains a persistent structural problem the profession has never fully solved, as the long-running parliamentary and regulatory attention to IP fees attests. The economics push firms towards either volume-and-process efficiency or towards higher-value advisory, administration and contentious work; the middle is thinning.

The solvent side has just come off a tax-driven boom

Members' voluntary liquidations ran hot as Business Asset Disposal Relief was progressively withdrawn: the CGT rate on qualifying MVL distributions rose from 10% to 14% in April 2025 and to 18% from 6 April 2026, and each deadline produced a rush of owner-managers racing to make first distributions at the lower rate — on £500,000 of retained profits, the final step alone was worth £20,000. That window has now closed.

At 18% the MVL remains, for most solvent companies with meaningful reserves, the most tax-efficient closure route — capital treatment still generally beats dividend rates, and the £1 million lifetime limit survives — but the urgency premium has gone. With no further scheduled rate rise to sell against, the deadline-driven pipeline that cushioned many practices through 2025–26 is normalising back towards the historic run-rate of 7,000–10,000 MVLs a year, and the advice conversation has shifted from “act before April” to case-by-case arithmetic.

“Clients who missed the April deadline should not assume the route has stopped working. It is no longer a race — it is arithmetic.”

3. Directors in the crosshairs: ODLAs and unlawful dividends

The direction of travel is clearly more aggressive, for structural rather than temperamental reasons. When the loan account is the estate's principal asset, it will be pursued — and in a market that is 78% CVLs of asset-light companies, that is now the norm rather than the exception. Liquidators routinely challenge the classic year-end “dividend” credited against drawings where there were no distributable reserves or no proper paperwork, recharacterising it as an unlawful distribution repayable under s.847 Companies Act 2006 or as a debt due on the loan account, with misfeasance claims under s.212 Insolvency Act 1986 in reserve.

The enabling factor is litigation funding

Manolete Partners, the AIM-listed insolvency litigation funder, completed 293 cases in FY26 and grew new case investments 23%; its average claim value rose from £124,000 to £158,000 and its forward book of live claims grew 37% to £67 million. Assignment or funding of claims means an IP no longer needs money in the estate to pursue a director — the economics that once let directors of empty companies walk away have gone. Creditor-friendly costs regimes and a maturing claims market have done the rest.

State enforcement has hardened in parallel

The Insolvency Service reported around 1,230 director disqualifications in 2024–25, with roughly 736 linked to Covid support scheme abuse — Bounce Back Loan funds drawn into loan accounts feature heavily — and the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 now allows investigation of directors who dissolved companies without liquidation. HMRC, restored to secondary preferential status since 2020, is more willing to petition, quicker to cancel time-to-pay arrangements, and more alert to personal liability routes where it perceives deliberate non-payment.

4. How the AIM-listed players are doing

The three listed pure-plays have, between them, had a good crisis — and their results are the best public window into the market's economics.

Begbies Traynor Group

Revenue grew about 12% to roughly £153 million in the year to 30 April 2025 (adjusted PBT c. £23.5 million), its tenth consecutive year of profit growth, with strong interims in December 2025 and market conditions described as remaining supportive. It is targeting £200 million of revenue, explicitly built on continued bolt-on acquisitions and on diversifying so that property services and advisory outweigh pure insolvency over time — a telling strategic judgement about where the founders of the UK's biggest volume insolvency practice think the long-term growth is.

FRP Advisory

The largest listed restructuring firm by revenue grew 16% to £177 million in the year to 30 April 2026 (adjusted EBITDA £46.1 million), and remains the number one appointment-taker in administrations with a 14% share. But the detail shows the pressures: EBITDA margin slipped from 27% to 26%, utilisation fell to 65%, staff costs and NIC rises bit, and work-in-progress has built to around £75 million — over five months of revenue locked up in cases, a reminder that even at the top end insolvency is a working-capital-hungry trade. FRP made three acquisitions in the year and now fields around 900 people, double its 2021 headcount.

Manolete Partners

A mixed year at the P&L level — realised revenue slipped 6% to £27.9 million on case-completion timing — but the underlying growth metrics (case signings, forward book, average claim size) point one way: the pipeline of claims against directors is expanding, not contracting, with medium-term targets of c. £42 million revenue. For accountants, Manolete's numbers are effectively a barometer of director-claim risk.

5. Consolidation, contraction — and the AI question

Consolidation is real and visible at both ends. The listed groups are running deliberate buy-and-build programmes — Begbies completing several earnings-accretive acquisitions a year, FRP three in FY26 alone — while private-equity-backed consolidation of the wider accountancy market is sweeping up regional firms with insolvency teams attached. At the same time the practitioner base is contracting: licensed IPs fell from 1,504 to about 1,480 between the 2025 and 2026 regulatory reviews, with roughly 1,262 taking appointments. The direction is towards fewer, larger, better-capitalised firms, with a long tail of small practices facing rising regulatory fixed costs that make exit-by-sale increasingly attractive.

On AI, separate the evidence from the inference

There is no hard evidence yet that AI is shrinking the market: 2025 was nearly a record year, and the listed firms grew double digits. What is observable is AI arriving as a margin and channel phenomenon. The large firms are spending on it — FRP cites technology and AI deployment among its efficiency priorities — because statutory insolvency work is document-heavy, process-driven and SIP-governed: exactly the profile that large language models compress. Case administration, statutory reporting, claims triage and books-and-records review are all automatable in part, which favours volume operators with the scale to build tooling and squeezes the labour-leverage model of mid-sized firms.

The second, less discussed effect is on the funnel: directors now ask an AI assistant “can I liquidate my company and what will it cost?” before they ask a professional, which rewards firms whose content, pricing and reputation are visible to those systems and further commoditises the routine CVL. AI is therefore better understood as an accelerant of the existing consolidation and polarisation than as a separate contraction force — so far.

6. New blood versus retirements

The profession is quietly ageing out. Total licence numbers are drifting down (1,504 to c. 1,480 year on year), and only around 1,262 IPs actually take appointments — for a market of roughly 24,000 company insolvencies a year plus tens of thousands of personal cases. The entrant pipeline is thin: the JIEB exams attract small cohorts each year, the exam remains a hard, niche qualification, and the traditional Big Four training ground has largely withdrawn from UK appointment-taking work, leaving the listed consolidators and independents to train the next generation.

Meanwhile a cadre of practitioners licensed in the 1986-Act boom years is reaching retirement, and rising regulatory intensity — complaints to the Insolvency Service gateway jumped 47% to 966 in 2025, with monitoring and sanction activity increasing — tips marginal older practitioners towards handing back licences. The practical consequences: succession-driven practice sales, rising day rates for experienced case staff, and, in time, genuine capacity risk in parts of the country if insolvency volumes spike again.

Regulation itself is mid-reform. Government has, for now, stepped back from a single regulator, but the announced framework — firm-level regulation alongside individual licensing, standards set by the Secretary of State rather than the professional bodies, a public register, and reserve powers to impose a single regulator if the RPBs do not demonstrably improve — will raise compliance costs and is likely to accelerate the structural trends in this briefing. Primary legislation is still awaited.

7. Other issues worth having on the radar

Personal insolvency is climbing fast and changing shape. March 2026 saw 12,252 individual insolvencies, up 30% year on year; debt relief orders hit successive records (4,523 in March) after the 2024 fee abolition and eligibility widening, and IVAs — 57% of individual insolvencies — are growing again, concentrated in a handful of volume providers whose conduct dominates the complaints statistics. Sole-trader and director-guarantee exposure means personal and corporate distress increasingly arrive together in the same client meeting.