UK sourcing supplier insolvent: is my deposit safe?
Your deposit is not automatically recoverable when a UK sourcing supplier becomes insolvent. Check whether you are claiming money owed or ownership of identifiable goods, then contact the person handling the insolvency. Recovery can be nil if there are no assets. Agree the order role and evidence with Cambridge China Bridge.
Establish who received the deposit
Start with the accepted quotation, contract, invoice and bank payment record. Match the company that owes you performance to the company you paid. Establish whether the provider sold you goods or acted as your agent, using who you contract with. A UK counterparty does not itself mean UK law governs the contract.
Ask where the deposit went, whether the factory received it and whose name appears on the factory order. Request supporting records rather than accepting a statement that production is paid for. Keep money still held by the provider, money sent onwards and goods already made separate in your evidence file.
Separate a refund claim from an ownership claim
If you paid for undelivered goods by a method other than credit card, Insolvency Service guidance says to contact the official receiver or insolvency practitioner to join the creditor list. Being listed does not guarantee repayment. In compulsory liquidation, recovery depends on available assets and claims; with few assets, you may receive nothing.
Do not assume payment proves ownership. Official guidance says ownership passes when the contracting parties intend, assessed through the terms, conduct and circumstances. Read the ownership clause alongside ownership and transit risk. If you assert ownership, ask a solicitor to assess that claim separately from the refund claim.
Build evidence for the actual goods
Ask for a batch inventory showing location, production status, serial or batch identifiers, carton markings and the order each item belongs to. Request dated photographs and matching inspection, packing and warehouse records. Explain how these identify your goods rather than interchangeable stock. A photograph of similar products is weak evidence.
Check whether the UK seller's terms retain ownership until payment, and ask whether anyone upstream asserts ownership or unpaid charges. Retention clauses generally delay ownership until payment, but their effect depends on the contract. For unfinished goods or mixed stock, get specific advice rather than assuming a label or allocation settles ownership.
Contact the case handler with a complete file
Check Companies House for liquidation or administration information and who is handling the case. Contact the appointed insolvency practitioner, or the official receiver handling a compulsory liquidation. Ask which claim form, supporting documents and submission deadline apply. For compulsory liquidation, official guidance describes submitting a proof of debt.
Send the contract and accepted terms, invoice, payment evidence, correspondence and a reconciliation of what remains undelivered. Present any ownership assertion with its goods inventory and supporting records separately. Ask for written acknowledgement and agreed collection arrangements if ownership is accepted. Avoid paying a rescue balance until you have checked the recipient, authority and written delivery proposal.
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Agree the evidence before the next deposit
Before another order, review the provider's finances and agree staged payments using the payment guide. Add explicit ownership wording, batch identification, storage records and access arrangements to the brief. If promised separate holding of funds, ask a solicitor to review the actual arrangement rather than relying on the account's label. For factory payment terms, see our guide to Chinese supplier deposits and balances.
Cambridge China Bridge can agree the seller or agent role in the quote and use its own staff in China to coordinate factory evidence. Ask for the evidence needed at each payment gate. Factory presence and inspection records help establish what exists; keep them separate from the legal assessment of ownership and deposit recovery.
Frequently asked questions
Will I get my deposit back if my UK supplier goes bust?
Repayment is not guaranteed. Contact the case handler to register the money claim. In compulsory liquidation, few or no assets can mean no recovery.
Do I own the goods because I paid a deposit?
Do not assume so. Check the ownership terms, conduct and circumstances, then gather records identifying the actual goods. Ask a solicitor to assess disputed ownership.
What evidence should I send to the liquidator?
Send accepted terms, the order, invoice, payment records and correspondence. For an ownership claim, add the inventory, location, batch identifiers and matching inspection or warehouse records.
Should I pay the factory again to release my order?
First check what the factory received, who placed its order and who controls release. Ask the case handler and your adviser to review the written proposal before you commit more money.