A statutory demand is a formal written demand giving your debtor 21 days to pay. If a limited company owes you more than £750 and ignores one, you can petition the court to wind it up. That petition costs you £2,952 up front and asks the court to close the company rather than to order it to pay you, so on most unpaid invoices a money claim is the route you actually want.
In this article
The short version
- A statutory demand gives your debtor 21 days to pay or to agree terms.
- The company threshold is a debt exceeding £750, under section 123(1)(a) of the Insolvency Act 1986; for an individual it's £5,000, under section 267.
- A winding-up petition costs £352 in court fees plus a £2,600 deposit.
- The £10,000 minimum you'll still find quoted was temporary, and it ended on 31 March 2022.
- A company that disputes the debt can apply for an injunction stopping your petition, under rule 7.24 of the Insolvency (England and Wales) Rules 2016.
Money claim or petition
A money claim asks the court to establish that you're owed the money and order your customer to pay. A petition asserts the company can't pay its debts at all and asks the court to wind it up, with whatever's left divided among all its creditors. GOV.UK is blunt about where that leaves you: "You might not get all or any of the money you're owed."
Your costs differ just as much. A money claim for £5,000 costs you £205 on the published scale in the EX50 fee schedule. A petition costs £352 plus a £2,600 deposit, and GOV.UK hedges your chance of seeing that £2,952 again: "You might be able to get the fees back if the company can afford to repay them." Its statutory demand page also says "there may be faster ways of getting smaller debts paid".
So if your debt is disputed at all, or your customer is solvent and simply slow, or the sum is a few thousand pounds, start with the money claim, which we cover in our guide to the small claims court. The demand and the petition earn their place where a company plainly able to pay won't settle an undisputed debt.
The thresholds for companies and for individuals
The two processes come from different parts of the Insolvency Act 1986, so your minimum and your forms depend on who owes you.
| Debtor | Minimum debt for the petition | Demand form | Time to pay |
|---|---|---|---|
| Limited company | More than £750 | SD1 | 21 days, then 3 weeks' neglect under the Act |
| Individual or sole trader | £5,000 or more | SD2, SD2R, SD3 or SD4 | 21 days |
Section 123(1)(a) deems a company unable to pay its debts where a creditor to whom it is "indebted in a sum exceeding £750" has served a written demand in the prescribed form and the company "has for 3 weeks thereafter neglected to pay the sum or to secure or compound for it". Exceeding £750 means a debt of exactly £750 doesn't get you there, and GOV.UK's summary says "£750 or more", so on that one figure you'd follow the Act.
For an individual, section 267 sets the bankruptcy level at £5,000, or a share of debts totalling at least £5,000, for an unsecured liquidated sum payable now or at a certain future date. You also need evidence the debtor can't pay, and no outstanding application to set aside your demand.
That last point is an asymmetry most content skips. An individual can apply to set aside a demand served on them. A company can't, and GOV.UK's director information hub says companies "cannot challenge a statutory demand made against companies", so its route is to apply within 21 days for an injunction. A sole trader trading in their own name puts you on the bankruptcy side of that table, with set-aside open to them.
Serving a statutory demand
You don't need a solicitor, and GOV.UK says as much: "Anyone who's owed money (the 'creditor') can make a statutory demand. You do not need a lawyer." Your debtor gets 21 days "to either: pay the debt [or] reach an agreement to pay", and where the debt is over six years old you "cannot usually make a statutory demand".
The Insolvency Service publishes the forms. SD1 demands immediate payment from a limited company; SD2, SD2R, SD3 and SD4 are the individual forms, for an immediate liquidated sum, a debt payable at a future date and a debt following a judgment. Plenty of sites blur the two sets. Comp 1 applies to wind up a company, and Comp 2 confirms your petition details.
Rule 7.3 of the Insolvency (England and Wales) Rules 2016 asks for rather more than a letter would:
- a heading naming section 123(1)(a) or section 222(1)(a)
- the company, its registered office and the creditor
- the amount of the debt and the consideration for it
- judgment or assignment details, where those apply
- a statement that payment is due within 21 days or winding-up proceedings follow
- a named individual an officer can talk to about settlement, with contact details
- any interest or accruing charge stated separately, with its amount or rate
- a date and an authentication
One item there tells your debtor how to fight you, by design: the demand must state that the company can apply to court for an injunction restraining the creditor from presenting or advertising a petition.
Serving one isn't a legal precondition either. The Insolvency Service's technical manual notes that failure to pay an undisputed debt "could provide the basis of a winding-up petition even though the creditor has not served a statutory demand for repayment". It's the safest evidential route to a section 123(1)(a) case, and paragraph 9.1 of the Practice Direction expects the prescribed form.
What it costs, and the figures still in circulation
Two payments are due before a petition can be presented, the court fee and the official receiver's deposit.
| Petition | Court fee | Deposit | Total up front |
|---|---|---|---|
| Winding up a company | £352 | £2,600 | £2,952 |
| Bankrupting an individual | £352 | £1,500 | £1,852 |
Court fees come from the HMCTS fee schedule EX50, last updated 13 July 2026, and the deposits from GOV.UK. Paragraph 9.3 of the Insolvency Practice Direction requires both before presentation, and a petition filed electronically without the deposit is marked private, with seven calendar days to pay.
Several other figures for this process are still published as current, and each has a date attached.
| Figure still in circulation | The current position |
|---|---|
| Minimum debt of £10,000 | More than £750, under section 123(1)(a). The £10,000 condition ran from 1 October 2021 to 31 March 2022 |
| Winding-up court fee of £332 | £352, per EX50 as last updated 13 July 2026 |
| Winding-up deposit of £1,600 | £2,600 since 1 November 2022 |
| Bankruptcy court fee of £372 | £352 |
| Bankruptcy deposit of £990 | £1,500 since 1 November 2022 |
The £10,000 was real, briefly. Schedule 10 of the Corporate Insolvency and Governance Act 2020, as substituted by S.I. 2021/1091, set a temporary condition that the debts owed to the petitioning creditors had to be "£10,000 or more", plus a requirement to serve notice and wait 21 days for the company to propose terms. That period began on 1 October 2021 and ended on 31 March 2022, and the ordinary threshold has applied again since 1 April 2022. The £10,000 was never the statutory demand threshold, and it stopped being the petition threshold more than four years ago.
The deposits moved on 1 November 2022, when the Insolvency Service raised the bankruptcy petition deposit from £990 to £1,500 and the liquidation deposit from £1,600 to £2,600, the first change since April 2016. A page still quoting £990 or £1,600 was accurate four years ago.
A third figure you may meet is genuinely current. From 9 January 2025 the deposit on a petition presented on public interest grounds is £13,500 under S.I. 2024/963, but that belongs to a petition by the Secretary of State and isn't your cost.
Checking any of this takes a minute. GOV.UK's wind-up page carries the fee and the deposit together, and EX50 shows its own last-updated date at the top. Where a figure appears with no date and no link to either, treat it as undated.
The debt has to be undisputed
The Insolvency Service's technical manual describes the basis for a petition as failure to pay an undisputed debt. Asking a court to accept that a company can't pay is a long way from asking it to work out whether your money is owed.
The rules show you what happens if you get that wrong. Rule 7.3 makes your demand tell the company it can seek an injunction, and rule 7.24 provides the route. Paragraph 9.2 of the Practice Direction shows the court's attitude to procedural misuse: save in exceptional circumstances a second petition shouldn't be presented while a prior one is pending, and "a petitioner who presents a petition while another petition is pending does so at risk as to costs".
Reading those together, our view is that a creditor who petitions over a debt the debtor genuinely disputes is exposed both to an injunction stopping the petition and to an adverse costs order, and the amount at stake can be a good deal larger than the invoice. That's our reading and not a rule you can point at, and no source cited here puts a figure on it. So where your customer has raised a substantive objection, a query you haven't answered or a counterclaim, take advice from a solicitor or a licensed insolvency practitioner first.
Two procedural details while you're here. You're expected to search for a pending petition first, and paragraph 9.6 requires your statement of truth to be dated no more than ten business days before the petition is issued.
Gazetting, and what it does to the debtor's bank
Once you present a petition it stops being private. Rule 7.10 requires you to give notice unless the court directs otherwise, and "the notice must be gazetted", not less than seven business days after service on the company and not less than seven before the hearing. Rule 7.12 then requires a certificate of compliance at least five business days before the hearing, and paragraph 9.8 wants your gazetted notices lodged by the same deadline, warning that failure may lead to "summary dismissal of the petition on the return date".
The Gazette's own guidance explains what the advertisement does: "The main reason that the petition is advertised is for other creditors to see that the company is insolvent", and "once the bank sees this petition, they usually freeze the company's bank account, which effectively puts a stop to all trading". That's The Gazette describing commercial practice, not a rule, and no source here says the freeze is automatic or required.
Behind it sits section 127 of the Insolvency Act 1986: any disposition of the company's property after the commencement of a winding up by the court is void unless the court orders otherwise, so a bank carrying on with the account is exposed and protects itself. The company can apply for a validation order for relief from section 127, and paragraph 9.11 confirms that route.
Think that through first. Publication invites the company's other creditors to appear, and rule 7.17 allows one of them to be substituted as petitioner, so your process can carry on without you. A frozen account also means a company that can't pay you this week. If you wanted your own invoice settled, your useful pressure is the 21 days between the demand and the petition.
Common questions
What is a statutory demand? A formal written demand for payment of a debt within 21 days. If your debtor doesn't pay or agree terms in that time, the demand supports an application to wind up a company or to bankrupt an individual.
How much does a company have to owe before you can wind it up? More than £750. Section 123(1)(a) of the Insolvency Act 1986 refers to a sum "exceeding £750", although GOV.UK's summary says "£750 or more".
Is the minimum for a winding-up petition £10,000? No. The £10,000 figure was a temporary coronavirus condition applying only between 1 October 2021 and 31 March 2022. It expired, and the threshold has been more than £750 since 1 April 2022.
What does it cost to present a winding-up petition? £352 in court fees plus a £2,600 deposit for the official receiver, both payable before the petition is presented. GOV.UK says you might be able to recover the fees if the company can afford to repay them.
Can a company set aside a statutory demand? No. GOV.UK says companies cannot challenge a statutory demand, and the company's route is to apply to court within 21 days for an injunction restraining the creditor from presenting a petition.
What happens if the debt is disputed? The process assumes an undisputed debt. A company that genuinely disputes it can apply for an injunction under rule 7.24, and you're exposed to a costs order, so a disputed debt belongs in a money claim.
Sources
- legislation.gov.uk — Corporate Insolvency and Governance Act 2020, Schedule 10 (accurate as of August 2026)
- legislation.gov.uk — Insolvency Act 1986, section 123 (accurate as of August 2026)
- legislation.gov.uk — Insolvency Act 1986, section 127 (accurate as of August 2026)
- legislation.gov.uk — Insolvency Act 1986, section 267 (accurate as of August 2026)
- legislation.gov.uk — Insolvency (England and Wales) Rules 2016, Part 7 Chapter 2 (accurate as of August 2026)
- legislation.gov.uk — Insolvency (England and Wales) Rules 2016, Part 7 Chapter 3 (accurate as of August 2026)
- legislation.gov.uk — S.I. 2021/1091, the temporary winding-up conditions (accurate as of August 2026)
- legislation.gov.uk — S.I. 2024/963, insolvency proceedings fees (accurate as of August 2026)
- GOV.UK — bankruptcy and insolvency forms (accurate as of August 2026)
- GOV.UK — civil court fees, EX50 (accurate as of August 2026)
- GOV.UK — statutory demands (accurate as of August 2026)
- GOV.UK — wind up a company that owes you money (accurate as of August 2026)
- Insolvency Service — creditor bankruptcy and liquidation petition deposits to rise (accurate as of August 2026)
- Judiciary of England and Wales — Insolvency Practice Direction (accurate as of August 2026)
- The Gazette — winding-up petition guidance (accurate as of August 2026)
This article is legal information about a court process and it is not legal advice. A winding-up petition is the most severe civil remedy available against a company. It can end the business, it exposes you to an injunction and to a costs order if the debt turns out to be disputed, and the £2,952 you pay to present it is rarely recovered. Take advice from a solicitor or a licensed insolvency practitioner before you serve a demand or present a petition. GOV.UK says the same to anyone receiving one. Fees and thresholds change, so check the current GOV.UK page before relying on a figure. Last updated August 2026.
