Corporate insolvencies in Scotland rise for second year in a row

There were 1,175 corporate insolvencies in Scotland in 2024-2025, rising for a second consecutive year, according to data from Accountant in Bankruptcy.

This was an increase of 0.6% compared with 2023-2024’s figure of 1,168, and an increase of 3.8% on 2022-2023’s figure of 1,132.

Tim Cooper, president of insolvency and restructuring trade body R3 and partner at Addleshaw Goddard LLP stated that this increase in corporate insolvencies is due to a rise in compulsory liquidations.

Furthermore, there were 1,673 personal insolvencies (bankruptcies and protected trust deeds) in 2024-25 Q4. A decrease of 213 (11.3%) when compared with 2023-24 Q4.

Cooper put this yearly decrease down to a drop in Protected Trust Deeds, which have fallen to the lowest level since 2015-16. This was likely due to the impact of changes to the process which took effect in July, introducing tighter eligibility criteria and increased scrutiny around the process.

Alongside this, in 2024-25 Q4, 442 debtor applications for bankruptcy benefitted from the revised fee structure. Of these, 412 cases (93.2%) paid no fee at all. The number of bankruptcies has remained broadly consistent, possibly reflecting a rise in the levels of debt individuals are carrying.

Cooper said: “We have seen an increase in creditors’ willingness to actively pursue debts, with HMRC the largest and most common applicant to issue a winding-up order in an attempt to recover money for public purse, and private sector creditors following them in an effort to balance their own books.”

“Members’ Voluntary Liquidation levels have also increased compared to last year – with a big increase in numbers in between Q2 and Q3 of this year. It may be that the prospect of having to navigate the rises in National Insurance and Minimum Wage, which came in at the start of this month, was too much for some directors and led to them closing their firms while they were still solvent and while the choice to do so was theirs.”

He added: “For many Scottish businesses, 2024 was less about growth and more about staying afloat. Economic growth remained sluggish and much of the momentum from earlier in the year gave way to flat conditions by the end of the Q4. Firms across a range of sectors have faced rising costs, weaker demand, and growing uncertainty about the broader economic outlook, all of which have made it increasingly difficult to plan and operate with confidence.”

“Looking ahead, it is clear that 2025 won’t be without its challenges. Cost pressures remain a real concern, and with growth expected to stay subdued, many firms will be working hard just to maintain stability. There is also uncertainty around global trade, particularly with new US tariffs on the horizon, which could affect some of our key exporters.”