We can no longer pay our creditors, should we liquidate or try something else?

You should get advice from an insolvency practitioner and a lawyer immediately, because directors are exposed to personal liability for reckless trading once a company is clearly insolvent. The main options under the Companies Act 1993 include a compromise with creditors, a voluntary administration under Part 15A, where an independent administrator investigates the company and proposes a deed of company arrangement, or a liquidation, which winds the company up and distributes assets. Sometimes an arrangement with major creditors such as Inland Revenue can preserve the business. Delay usually worsens the position. Record decisions carefully, avoid preferring some creditors over others and do not transfer assets cheaply, since a liquidator can challenge those transactions. Personal guarantees you gave to lenders or landlords remain enforceable even if the company fails.