The Two-Minute Check Welsh HomeownersShould Do Before Paying a Builder’s Deposit

Nearly six in ten Welsh building firms with overdue accounts were insolvent, had been
struck off or were facing strike-off within a year, according to new analysis by insolvency
firm Clarke Bell.
The research suggests homeowners in Wales can spot a higher-risk builder before
handing over a large deposit simply by checking one date on the free Companies House
register.
Clarke Bell tracked 12,258 trading building and trades companies registered in Wales
that were active and at least a year old on 1 September 2025, and followed what
happened to them over the next 12 months.
Of the 266 Welsh firms whose accounts were overdue at the start of the study, 58.3%
had entered insolvency, been removed from the register or were facing strike-off a year
later.
That compares with 10.6% of Welsh firms whose accounts were up to date, making
those with overdue accounts 5.5 times more likely to go bust or face being struck off.

The pattern was the same a year earlier. In the 2024/25 figures, Welsh builders with
overdue accounts were 5.2 times more likely to be gone or going within 12 months.

The Welsh results are higher than the UK-wide picture, where half (51%) of building
firms with overdue accounts were gone or going within a year, against one in ten (10%)
of those that were up to date.
The Two-Minute Check Homeowners Can Make
Before paying a significant deposit to a builder trading as a limited company, Clarke Bell
recommends five simple checks:

Look the company up on the free Companies House register. If the trading name
is different, ask for the registered company name or company number.
Check whether its accounts are overdue. If the due date has passed, ask why
before paying anything.
Check whether its confirmation statement is overdue. This is a strong sign that a
company may be struck off.
Search The Gazette for a winding-up petition.
Keep deposits small and pay by credit card where you can. Section 75 of the
Consumer Credit Act can make the card provider jointly liable for items costing
more than £100 and no more than £30,000.
John Bell, Senior Partner and Licensed Insolvency Practitioner at Clarke Bell, said:
“When a building company goes into liquidation, customers who have paid a deposit
usually join the queue of unsecured creditors, and they rarely get much back. Overdue
accounts are often one of the first public signs that a company is struggling. It takes two
minutes to check, and it could save you thousands.”
The research comes as the government backs new measures aimed at improving
consumer protection in the home-improvement market, including an Approved Code for
participating businesses and a Trusted Payments service designed to protect customers’
money while work is completed.
What the Checks Can and Can’t Tell You
Clarke Bell stresses that a warning sign raises the odds rather than predicting what will
happen to any individual company. Companies can also be struck off for reasons other
than business failure.
The checks apply only to limited companies. Sole traders and partnerships are not on the
Companies House register.