On 29 October 2026, Poundland filed a notice of intention to appoint administrators. On 3 November, the Government told the Commons that the retailer was still trading. For suppliers with unpaid invoices, the distinction matters. Once a customer enters administration, the law can restrict a supplier’s ability to stop deliveries or insist that arrears are paid before it continues to supply.
For owners and finance directors, the immediate task is to establish three things: how much the customer owes, which orders the business has already accepted, and who can authorise the next delivery.
What does a notice of intention change?
In England and Wales, a valid notice of intention to appoint administrators generally gives the company up to ten business days’ protection from most creditor enforcement action. Directors remain in control during that window and may use it to explore a rescue or sale.
If the company enters administration, a licensed insolvency practitioner takes control. The administrator may continue trading and sell all or part of the business. For a supplier, that makes it particularly important to establish which company owes the old invoices and which company is placing any new order.
Can you stop supplying until the old invoices are paid?
Section 233B of the Insolvency Act 1986 is a permanent rule introduced in 2020. It applies to many contracts for the supply of goods or services. Once a customer enters administration, a supplier generally cannot use a contractual right to terminate simply because the customer has entered that process. Nor can it make payment of outstanding invoices a condition of continuing supply.
Consider a wholesaler whose September invoice is overdue. Its contract gives it a right to terminate for late payment, but it continues delivering. If the customer subsequently enters administration, the wholesaler generally cannot exercise that earlier right during the administration. A notice of intention alone does not trigger this section. The timing of the breach, the terms of the contract and the stage the customer has reached all matter.
There are exceptions, including for certain financial services and contracts. An administrator can consent to termination, and a court can permit it where continuing the contract would cause the supplier hardship. A fresh failure to pay after appointment should be assessed separately.
What suppliers should do now
- Check the next order before dispatch. Establish whether you have already accepted it and what your terms say about suspension, termination and notice. If an administrator has been appointed, ask who is authorised to place orders and obtain written confirmation of the payment terms for new deliveries.
- Identify stock that may still belong to you. If your contract includes a retention of title clause, match unpaid invoices to delivery notes, batch numbers and goods still at the customer’s premises. Send that evidence to the administrator promptly and ask for the goods to be identified and preserved. Goods that have been resold, processed or mixed with other stock can be harder to recover. Obtain agreement or the necessary permission before attempting collection.
- Prepare your claim and revise your forecast. Reconcile invoices, credits and payments against the correct customer company. Follow the administrator’s instructions for submitting a proof of debt. Unsecured suppliers can recover little or nothing, so check whether your own business could still meet payroll and pay its suppliers if the expected receipt never arrives.
What to change before the next customer gets into difficulty
Three Poundland Limited directors left office on 27 October, two days before the notice. A change of directors tells a supplier little on its own. It warrants closer attention when a customer is also missing promised payment dates, asking for longer terms or increasing orders during a sale process. The person who can approve further credit needs that information before the next delivery leaves the warehouse.
Review your credit limits and who can override them. Check whether your terms give you clear rights to suspend supply or terminate when defined signs of financial deterioration arise, subject to insolvency restrictions. For a major account, consider what financial information the customer should provide and how often. Finally, test your retention of title clause against a real delivery. Could your team identify the unpaid goods today?
How PJS can help
Our supply-terms health check reviews your contract alongside the way your sales, finance and warehouse teams approve credit, accept orders and release goods. To arrange a review, contact PJS through our website.
PJS Business & Advisory Ltd trades as PJS. It is not a firm of solicitors and is not regulated by the Solicitors Regulation Authority. This article provides general information. Obtain advice on your particular contract before suspending supply, terminating an agreement or seeking to recover goods.
