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Company Insolvencies on the Rise
Find Out Why Company Insolvencies are on the Rise, 1/27/2023 - FOR IMMEDIATE RELEASE

Cardiff, UK - Company Insolvencies on the Rise

Going by data from the Insolvency Service, England and Wales experienced a steep rise in annual insolvencies (21%) in November, which accounted for the second-highest monthly figure dating back to 2019. The only month that topped this figure was March, which can be attributed to pandemic-related factors.

Overall, this is an unfortunate trend that should concern the UK government, especially after the Bank of England admitted that they were under a lot of pressure. So, what does this mean for businesses?

Insolvency statistics November 2022: Key Takeaways

The total number of registered company insolvencies was 2,029 in November 2022, and this represented:

? A 21% rise compared to the total insolvencies in the same month of the previous year (1,676 in November 2021).

? A 35% rise compared to the insolvencies in the same month three years ago and before the pandemic (1,505 in November 2019).

In summary, the total number of compulsory insolvencies or company voluntary arrangements is seeing a significant rise from the lows experienced in the middle of the Coronavirus pandemic. For instance, creditors’ voluntary liquidations or compulsory liquidations in November 2022 were 290, 5 times more than in the same month of 2021, and 7% higher than in the same month of 2019. There was also an increase in individual voluntary arrangements in the same month.

There were fewer business insolvencies and restructuring plans registered during the pandemic in 2020 due to government support to cushion against the effects of the Coronavirus through debt relief orders. The average quarterly company insolvency in the first quarter of 2020 was slightly lower than the averages from 2019 and 2015. Unfortunately, the government has slowly halted key support incentives since the second quarter of 2020, which was easily a lifeline for many small businesses. unable to pay debts


Why has this happened?

While several factors have likely played a part in the rising corporate insolvency, the main ones are difficulty in meeting debt obligations, rising energy costs, supply chain disruptions, and rising costs of raw materials. This is according to data from the Business Insights and Impact of the UK economy. It’s also possible that the increase in monthly insolvency statistics seen since 2021 represents some natural adjustment from the dip in 2020.

In explaining the increasing insolvencies, the Insolvency Service blamed the increasing winding-up petitions by Her Majesty’s Revenue & Customs (HMRC). Case in point, the compulsory liquidations in October and November were significantly higher compared to the same months before the pandemic due to 95 petitions presented by just one bank.

In November 2022, 1595 creditors voluntarily liquidated their businesses (individual insolvency national statistics), representing a 5% rise from the same month in 2021 and double the number in 2019.

If you need help or advice on your business finances, please get in touch with us at Hayvenhursts Accountancy Services today at 02920 777 756 or by using our contact form here.

We can arrange a consultation with one of our experts, and we commit to getting to know you and your business and finding ways of helping you move forward and supporting you using our knowledge and experience.

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