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Insolvency-related activity in Scotland reached its highest level in more than two years last month, according to research by the trade body R3.
R3 said its analysis of Creditsafe data showed 141 cases of insolvency-related activity were recorded in May 2025, the highest monthly figure since December 2022.
The total marked a 30.6% increase on April’s figure of 108 cases, and an 18.5% rise compared to May 2024, when 119 cases were reported. The figures cover appointments of administrators and liquidators, as well as creditors’ meetings.
Scotland recorded the largest month-on-month and year-on-year percentage increases in insolvency-related activity of any part of the UK.
Tim Cooper, immediate past president of R3 and partner at law firm Addleshaw Goddard, said: “We have seen a substantial rise in insolvency-related activity in Scotland since the start of the year, but last month’s rise to the highest point in more than two years is a reminder of just how tough trading conditions are.
“Levels are now higher than they were for much of 2023 and for 2024, when many businesses were grappling with the aftermath of Covid and the impact of the cost-of-living crisis.”
Cooper said a number of factors were likely contributing to the increase, including more members’ voluntary liquidations (MVLs) as directors respond to policy changes such as higher employers’ National Insurance contributions and an increased minimum wage.
He added: “We are also seeing a rise in winding up petitions as creditors take the lead from HMRC, which has become increasingly more willing to chase the debts it is owed. HMRC’s more assertive stance seems to be influencing other creditors to follow suit, particularly where there are signs of persistent non-payment.
“This increase in insolvency-related activity also reflects the wider economic picture in Scotland. Business activity remains subdued, and firms continue to face persistent cost pressures, higher tax obligations, and weak demand. For some, the combination of these pressures is tipping already fragile businesses into formal insolvency processes.”
