Company insolvencies rise 16% in March
It comes as the numbers of compulsory liquidations have increased from historical lows seen during the coronavirus pandemic, partly as a result of an increase in winding-up petitions presented by HMRC
The number of registered company insolvencies in March 2023 was 2,457, 16% higher than in the same month in the previous year (2,120 in March 2022), according to the latest figures released by the Insolvency Service.
This was higher than levels seen while the Government support measures were in place in response to the coronavirus pandemic and also higher than pre-pandemic numbers.
In addition, there were 288 compulsory liquidations in March 2023, which is more than twice the number in March 2022.
It comes as the numbers of compulsory liquidations have increased from historical lows seen during the coronavirus pandemic, partly as a result of an increase in winding-up petitions presented by HMRC.
It also revealed that by March 2023 there were 2,011 Creditors’ Voluntary Liquidations (CVLs), 9% higher than in March 2022.
The Number of administrations and Company Voluntary Arrangements (CVAs) were also higher than in March 2022.
Commenting on the figures, Christina Fitzgerald, president of R3, the insolvency and restructuring trade body, and a partner at Edwin Coe LLP, said: “The rise in corporate insolvencies – to the highest levels for more than three years – has been driven by increasing numbers of Creditors’ Voluntary Liquidations, which are also at a three-year high.
“Business owners have spent three years trading through a pandemic and economic uncertainty, and an increasing number are choosing to shut their businesses before that choice is taken away from them and as the turbulent trading climate proves too much.”
She added: “Businesses across Britain are struggling at the moment. Costs continue to rise at a time when consumers are cutting back on discretionary spending, and when staff are requesting pay rises to cover their bills. With the Government’s Energy Bill Relief Scheme ending at the end of March, many businesses will be facing further increases in costs at a time when they can ill-afford them.
“Directors need to be vigilant about the signs of financial distress and seek advice as soon as they spot issues with their business or begin to worry about its finances. If stock is starting to pile up, cashflow is an issue, or the business is having problems paying rent, staff or suppliers, now is the time to seek advice, rather than further down the line when these issues have evolved into problems.”
