THERE WERE 2,163 registered company insolvencies in June 2023, up 27% on June 2022 and higher than before or during the pandemic.

There were 260 compulsory liquidations in June 2023, higher than in June 2022. Compulsory liquidations have increased – up 77% on June 2023 – partly as a result of an increase in winding-up petitions by HMRC.

In June 2023 there were 1,759 Creditors’ Voluntary Liquidations, 21% higher than in June 2022. Numbers of administrations and Company Voluntary Arrangements (CVAs) were also higher than in June 2022.

Nick O’Reilly, Director of Restructuring and Recovery at MHA, said: “Insolvencies will continue to rise throughout 2023 as the effects of Covid-19 recovery loans continue to bite businesses and the economy. Businesses previously propped up by the loans are failing in greater numbers, particularly hospitality, construction and real estate, which will be the biggest victims of business insolvencies this year.

“The fall in customer demand, an economic downturn and increased interest rate of 5%, on top of high inflation and the cost of living crisis, has meant businesses and small to medium enterprises (SMEs) have had little time to build a healthy cash reserve or recover from the post-pandemic impact. Many are considering closing or have closed their doors for good, and its crucial government initiatives are introduced quickly to help stem the flow.

“Reforms within the business rate regime are urgently needed to encourage businesses to invest, grow and innovate. The Non-Domestic Rating Bill will introduce new business rates for property and building improvements and provide much-needed relief and tax breaks for the construction sector, however sectors including leisure and hospitality continue to be left in the lurch.

“Restructuring the Covid-19 support repayment terms will allow business to have more time to pay back and allow them to internally restructure their commitments. Additional Government assistance for companies with outstanding Covid-19 loans will further help them allocate resources efficiently and survive during this economic downturn.”

Individual Bankruptcies

Individual bankruptcies were up in June too, 643 were registered, up 29% on June 2022, but less than half of pre-2020 levels.

While Debt Relief Orders (DROs) in June 2023, were higher than June 2022, Individual Voluntary Arrangements (IVAs) were lower than last year.

>> Read about more company insolvencies in the news

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