Insolvency Statistics reveal increase in company insolvencies
21 Feb 2018

It’s been hard to make sense of the UK Government’s Insolvency Statistics throughout the last year. The figures are skewed due to changes in legislation regarding claimable expense rules which have forced large numbers of companies into insolvency. The impact of these changes amounts to 1,796 additional insolvencies in Q4 216, 1,131 additional insolvencies in Q2 2017 and an estimated 1,000 insolvencies in Q4 2017. Taking these “exceptional” cases out of the underlying trends shows a fairly stable, though slightly increasing trend throughout 2017. The current thinking is that insolvencies will remain high for the first quarter of 2018 due to weakening consumer demand, increasing interest rates, recession in the construction sector, weaker than hoped for exports and uncertainty over Brexit dampening down on business investment.

The statistics also found that the number of company insolvencies increased overall in 2017, driven by a rise in creditors’ voluntary liquidations. It was stated that 4,382 companies entered insolvency from October to December 2017; this consisted of 3,414 creditors’ voluntary liquidations (CVL), 613 compulsory liquidations and 356 other insolvencies.

Interestingly, although the bulk insolvency event had a significant impact on the results, in comparison to Q3 the underlying number of companies that entered insolvency decreased by 17.2%. The statistics also found that the number of compulsory liquidations and other insolvencies remained broadly stable in Q4.

If you are worried about your business credit control and want to ensure that your business is protected against any business insolvency, please contact our specialist advisors on 01275 817320.