Insolvencies jump to new high in March
Latest figures from the Insolvency Service show that the number of company insolvencies has risen by more than a third across England and Wales.
Company insolvencies stand at a three-year high with corporate insolvencies rising by 37.7% in March to 2,457 compared to 1,784 in February. The figure is also 15.9% higher year-on-year, largely driven by increasing numbers of creditors’ voluntary liquidations (CVLs).
Whilst increases in insolvencies were seen across most sectors, the worst were in construction, followed by wholesale and retail, accommodation and hospitality, and manufacturing.
CVLs increased by 9% in March 2023 to a total of 2,011 compared to the same period last year, which stood at 1,842.
The number of administrations and compulsory voluntary arrangements (CVAs) was also higher than in March 2022.
In addition, 288 compulsory liquidations were also documented, which was more than twice the number in March 2022 – partly as a result of an increase in HMRC winding-up petitions.
Struggling company bosses choosing to shut whilst they have the choice
The CVLs figures indicate that an increasing number of business owners are choosing to shut their businesses before that choice is taken away from them as pressures of the turbulent economic climate prove too much.
Businesses across Britain are continuing to struggle at the moment with costs rising at a time when consumers are cutting back on discretionary spending. At the same time, staff are requesting pay rises to cover their own rising household and food bills.
Also, The Government’s Energy Bill Relief Scheme ended last month meaning even higher costs for businesses when they can ill-afford them.
Don’t ignore the signs of financial distress
Jason Elliott, Cowgills Partner and Head of Business Recovery urges business owners to look out for the signs of financial distress and act as soon as there are indications that there might be an issue. Jason commented ‘Business owners must be vigilant about the signs of financial distress and seek advice as soon as they spot issues with their business or are starting to be concerned about its finances.
‘If your business struggling to pay rent, staff or suppliers, now is the time to seek advice. Don’t just kick the can further down the road – if you act as soon as you sense a problem you have more potential options for resolving it.
‘If you are worried that your business is in financial distress you should seek professional advice as soon as possible – early intervention is vital to survival. Restructuring assistance is available and possible but timing and planning are key.’
Get in touch now and our experienced team can work with you to look at what options are available.
The information was correct at time of publishing but may now be out of date.