A statutory demand is a formal written demand that gives a debtor 21 days to pay or agree terms. If a limited company owes you more than £750 and ignores one, you can petition to wind it up, which costs £352 in court fees plus a £2,600 deposit and asks the court to close the company, not to order it to pay you. For a customer who's slow but solvent, or any debt that's disputed, a money claim is usually the better route.
In this article
The short version
- A statutory demand gives a debtor 21 days to pay or agree terms.
- A company owing more than £750 can then face a winding-up petition; for individuals the bankruptcy threshold is £5,000.
- A winding-up petition costs £352 in court fees plus a £2,600 deposit.
- The £10,000 minimum still quoted online ended on 31 March 2022.
- For a disputed debt or a slow but solvent customer, a money claim is usually better.
Statutory demand or money claim?
The two routes ask the court for different things. A money claim asks it to confirm you're owed the money and order your customer to pay. A winding-up petition says the company can't pay its debts at all and asks the court to close it, with whatever's left shared among all its creditors. GOV.UK warns that you might not get all, or any, of what you're owed.
The costs differ too. A money claim for £5,000 costs £205 to issue, and you add it to the claim. A winding-up petition costs £352 plus a £2,600 deposit, £2,952 in total, and you might get the fees back only if the company can afford to repay them.
So if your customer disputes the debt at all, or is solvent and simply slow, or the sum is a few thousand pounds, a money claim is usually where to start. A statutory demand earns its place when a company that plainly could pay won't settle a debt nobody disputes, because a 21-day deadline with a petition behind it tends to get a response.
The thresholds for companies and individuals
The rules differ depending on who owes you.
| Who owes you | Minimum debt for a petition | What they can do after a demand |
|---|---|---|
| A limited company | More than £750 | Pay, agree terms, or apply to court to stop a petition |
| An individual or sole trader | £5,000 | Pay, agree terms, or apply to court to set the demand aside |
For a company, the Insolvency Act treats it as unable to pay its debts if it owes you more than £750, you've served a statutory demand in the right form, and it hasn't paid or agreed terms within three weeks. For an individual, including a sole trader trading under their own name, the bankruptcy threshold is £5,000, and the petition costs £352 in court fees plus a £1,500 deposit.
You may still see a £10,000 minimum quoted online. That was a temporary Covid-era rule for winding-up petitions, and it ended on 31 March 2022.
How to serve a statutory demand
You don't need a solicitor to serve one. The Insolvency Service publishes the forms: SD1 for a limited company, and separate forms for individuals depending on whether the debt is due now, due later or follows a court judgment. A demand to a company has to include:
- the company's name and registered office, and your details
- the amount owed and what it's for, with any interest or charges shown separately
- a statement that the company must pay within 21 days or face winding-up proceedings
- a named person the company can contact about settling it
- a statement that the company can apply to court to stop a petition
You usually can't serve a statutory demand for a debt that's more than six years old.
A statutory demand isn't strictly required before a petition, but it's the cleanest evidence that the company can't pay, and the court expects the proper form to be used.
What a winding-up petition costs and sets off
You pay the £352 court fee and the £2,600 deposit before the petition is presented. Once it's served, the petition has to be advertised in The Gazette before the hearing. That's the point at which it stops being private.
When a company's bank sees the advertisement, it will usually freeze the company's account, because payments made after a petition can later be declared void. A company with a frozen account can't pay you this week either, and other creditors can join the petition or take it over. If what you want is your own invoice paid, your best chance is usually the 21 days between the demand and the petition.
The process assumes the debt is undisputed. If your customer has raised a genuine dispute, a query you haven't answered or a counterclaim, it can apply for an injunction to stop the petition, and you risk paying its legal costs as well as your own. Take advice from a solicitor or a licensed insolvency practitioner before you serve a demand on a company that disputes what it owes.
Before you get this far, it helps to know the customer has had every chance to pay. Adfin keeps chasing overdue invoices on your schedule and its collection agents can send a statement of everything outstanding when a customer goes quiet, so a statutory demand isn't the first time they've seen the full balance.
Common questions
What is a statutory demand? A formal written demand for payment within 21 days. If the debtor doesn't pay or agree terms, it supports a petition to wind up a company or bankrupt an individual.
How much does a company have to owe before I can wind it up? More than £750. For an individual or sole trader, the bankruptcy threshold is £5,000.
Is the minimum for a winding-up petition £10,000? No. That was a temporary rule that ended on 31 March 2022.
How much does a winding-up petition cost? £352 in court fees plus a £2,600 deposit, both paid before the petition is presented. You may get the fees back only if the company can afford to repay them.
Can a company challenge a statutory demand? It can't have the demand set aside, but it can apply to court for an injunction to stop a petition, for example if it disputes the debt.
Should I serve a statutory demand if the debt is disputed? Usually not. A disputed debt belongs in a money claim, and petitioning over one risks an injunction and a costs order against you.
Sources
- GOV.UK - Statutory demands (accurate as of October 2026) https://www.gov.uk/statutory-demands
- GOV.UK - Wind up a company that owes you money (accurate as of October 2026) https://www.gov.uk/wind-up-a-company-that-owes-you-money
- GOV.UK - Apply to bankrupt someone who owes you money (accurate as of October 2026) https://www.gov.uk/apply-to-bankrupt-someone
- legislation.gov.uk - Insolvency Act 1986, section 123 (accurate as of October 2026) https://www.legislation.gov.uk/ukpga/1986/45/section/123
- The Gazette - Winding-up petitions (accurate as of October 2026) https://www.thegazette.co.uk/insolvency/content/101087
- Adfin - Credit control (accurate as of October 2026) https://www.adfin.com/credit-control
