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Corporate insolvencies ‘significantly lower’ in August 2020

Corporate insolvencies for England and Wales, fell to 778 in August 2020 compared with the previous month’s figure of 961, according to figures from the Insolvency Service.

The decline in insolvencies was likely due to the increase in government support to companies as a result of Covid-19. 

What’s more is that the overall number of company insolvencies decreased by 43% in August 2020, when compared to the same month last year. 

This was primarily driven by a decrease in the numbers of creditors’ voluntary liquidations (CVLs )and compulsory liquidations which fell by 39% and 67%. 

President of insolvency trade association, R3 Colin Haig, said: “The decrease in corporate insolvencies over August was driven by a drop in administrations and compulsory liquidations.

“Despite this  news, there is no question that the pandemic is taking its toll on businesses and individuals, but this impact is not being reflected in the insolvency figures, yet.” 

He added: “With a number of temporary Government measures aimed at reducing insolvency numbers set to come to an end on 30 September, this situation may start to change before long.

“The Government’s support measures have provided vital protection for businesses and consumers, but as they begin to wind down and this crucial safety net disappears, we expect to see more requests for personal and corporate insolvency support.” 

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