Under the law of England & Wales, a creditor may only present a winding up petition if at least £750 of the debt is undisputed and due. If the winding up minimum is not met, the court does not have jurisdiction to make a winding up order.
There is no maximum debt limit. However, the insolvency court will only allow a petition to proceed where the debt is clearly payable and not genuinely disputed.
The £750 threshold derives from section 123 of the Insolvency Act 1986, which governs a company’s inability to pay its debts.
What is the statutory threshold?
The current statutory minimum is £750.
A petition may only be presented where at least that sum is clearly due and payable. If the debt falls below this figure, the court cannot make a winding up order.
Importantly, the minimum must be undisputed. If the company disputes liability on substantial grounds, the petition may be dismissed even if the total amount claimed exceeds £750.
You can read more about disputed debts in our guide on winding up petition misuse and abuse of process.
Why is the £750 threshold significant?
Although £750 is a relatively modest figure, a winding up petition is not intended to be a routine debt recovery tool.
The court expects creditors to use the insolvency procedure responsibly. If a petition is presented for a modest sum in circumstances where the debt is disputed, the court may treat the petition as an abuse of process.
For that reason, the legal test is not simply the amount owed. It is whether the debt is clearly due, payable and genuinely undisputed.
Does it make commercial sense to issue a petition for a low-value debt?
This depends entirely on the circumstances.
Issuing a petition involves court fees, procedural steps and reputational consequences. It also carries risk. If the debt is disputed, the petition may be dismissed and the creditor may face an adverse costs order.
However, where a debt is clearly due and unpaid and there is evidence of insolvency, a petition can be an appropriate and proportionate step. It should not be used simply to accelerate payment in a contested dispute.
Our expert winding up petition team has dealt with over 1,000 petitions and is able to answer any question you might have.
Each case requires careful legal and commercial assessment.
What if the debt is partly disputed?
A petition can only proceed if at least £750 of the debt is genuinely undisputed.
If part of the debt is disputed, the court will examine whether the undisputed balance meets the statutory minimum. If the undisputed portion falls below £750, the petition will not succeed.
Where there is a real dispute as to liability, the correct course is usually ordinary civil proceedings rather than insolvency action.
If your company has been served with a petition and believes the debt is disputed, you may wish to read our guide on how to defend a winding up petition.
What should companies do if served with a petition below £750?
If a company receives a petition and believes the statutory threshold has not been met, urgent advice should be taken.
Where the minimum debt requirement is not satisfied, the company may apply to have the petition dismissed.
Early action is important, particularly before advertisement and in light of strict winding up petition time limits.
Key points
The statutory minimum debt for a winding up petition is £750. The debt must be clearly due and undisputed. Petitions presented below the threshold, or in genuinely disputed circumstances, are likely to be dismissed and may result in costs consequences for the petitioner.
Speak to our team
If you are considering issuing a winding up petition, or have received one and are concerned about the statutory threshold, we can review the position and advise on the safest course under the law of England and Wales.
