Insolvency Service payouts hit record high

The government’s insolvency service paid out a total of £453m from the National Insurance Fund in 2020 to former members of staff after their employers entered into administration, liquidation, or a CVA analysis, according to real estate adviser, Altus Group. 

Analysis by Altus found that £297m was paid out in redundancy pay, whilst £93m was for money that “would have been earned working a notice period”. 

In addition, a further £28m went on unpaid holiday pay and £35m went on outstanding payments for wages, overtime and commission owed. 

Altus Group has said this is the “highest amount paid” out of the National Insurance Fund at any time during the last decade. A figure which has been driven by the “high street crisis taking total payments from the fund to £3.02bn during the last 10 years”.

Despite this, the actual number of underlying company insolvencies during 2020 fell by 27% with £280bn of government support keeping the “pilot light” on for many struggling firms.

Robert Hayton, UK president of property tax at Altus Group said: “Ending the [business rates]  holiday too early is one material pressure on company finances that risks affecting the recovery from the pandemic now the end is in sight.

“The chancellor must use his upcoming Budget to ensure that viable businesses are adequately supported through a discerning targeted extension.”