Can I still pay wages after a winding-up petition?
Be very careful. Once a winding-up petition has been presented against your company, any disposition of company property made after that date can be void under section 127 of the Insolvency Act 1986 if the company is later wound up. In practice the bank usually freezes the account once the petition is advertised, so payments stop anyway. Paying wages, suppliers or anyone else from company funds after the petition therefore risks being unwound, and the directors can be asked to repay. If the business genuinely needs to keep trading or pay staff, the proper route is to apply to the court for a validation order authorising specific payments. Do not simply keep paying out and hope it is fine. Take advice from a Licensed Insolvency Practitioner straight away.
Why payments after the petition are at risk
Section 127 of the Insolvency Act 1986 makes any disposition of the company's property void from the date the petition is presented, if a winding-up order is later made, unless the court orders otherwise. The aim is to stop a company's assets being drained while creditors wait. Because the rule bites from the petition date, not the winding-up order, payments you make in the gap can later be challenged by the liquidator, and the recipients, or the directors who authorised them, can be required to repay.
The account freeze
Winding-up petitions are usually advertised in The Gazette. Once a bank sees the advert it will normally freeze the company account to protect itself, so wages and direct debits stop regardless of your intentions. This often happens before the hearing, which catches directors by surprise.
The proper route: a validation order
If the company needs to make essential payments, such as wages, rent or supplies to keep trading while the petition is dealt with, you can apply to the court for a validation order that authorises specific payments in advance. The court will want to see that the payments are in the interests of creditors as a whole. This is the safe way to pay people after a petition, rather than paying first and risking it being void.
Related: winding-up petitions, the petition timeline, not being able to pay wages, and creditors' voluntary liquidation.
Paying wages after a petition: common questions
Are wage payments after a winding-up petition automatically void?
Not automatically, but they are at risk. Under section 127 of the Insolvency Act 1986 any disposition of company property made after the petition is presented is void if a winding-up order is later made, unless the court orders otherwise. So the payment is not void unless and until an order is made, but if it is, the liquidator can require the money to be repaid. This is general information; take advice from a Licensed Insolvency Practitioner before paying anyone.
Can I pay staff from my own money or a new account if the company account is frozen?
Paying staff from personal funds is your money to spend, but be careful: if you then try to reclaim it from the company you become a creditor making a payment in the same risky window, and you have no priority over other creditors. Opening a new account to route company income around the freeze is worse, because that income still belongs to the company and the same section 127 risk follows it. The clean answer is a validation order covering the wages, not a workaround.
What happens to my employees' unpaid wages if the company is wound up?
Employees are not left with nothing. In a winding up they rank as preferential creditors for limited arrears of wages and holiday pay, and the government's Redundancy Payments Service pays statutory amounts, redundancy, notice, arrears and holiday up to the statutory caps, out of the National Insurance Fund. So if you cannot safely pay wages now, staff still have a route to recover the statutory minimum once a practitioner is appointed.
Could I have to repay wages I paid out personally?
Possibly. If payments are declared void, the liquidator can seek to recover them from the recipients, and directors who authorised payments while the company was insolvent can also face claims for misfeasance under section 212. That is why the proper route is a validation order rather than paying first. Speak to a Licensed Insolvency Practitioner about your own position.
This is general information, not legal or financial advice, and is based on the Insolvency Act 1986. If a winding-up petition has been presented against your company, get advice from a Licensed Insolvency Practitioner immediately. Last reviewed June 2026.