Political issues at both national and global level have impacted heavily on local businesses as the prospect of higher employment costs and the threat of trade tariffs across England and Wales pushed up corporate insolvencies by almost a tenth in March.
This is according to the Midlands branch of the UK’s insolvency and restructuring trade body R3 and comes on the back of latest figures from the Insolvency Service which show that corporate insolvencies increased by 9.1% last month [March] to a total of 1,992 compared to March 2024’s figure of 1,826.
R3 Midlands chair Stephen Rome, a partner at local law firm Penningtons Manches Cooper, said: “Longstanding challenging trading conditions and the increased willingness of public and private sector creditors to turn to winding-up orders to pursue monies owed have impacted heavily on business distress, both locally and nationally.
“However, it is the announcement of the US tariffs and the rises in National Minimum Wage and Employers National Insurance which have caused directors most concern over the last few weeks.
“While it is too early to understand the extent the tariffs will impact on businesses, we know they will influence purchase and sale prices as well as margins and profits and, potentially, a firm’s ability to service debt and source rescue funding.
“At the same time, March was the last month before the NI and Minimum Wage increases came in, and this has affected business confidence locally, as well as recruitment and investment. If firms have not made the most of the time between its announcement and introduction, we could see an increase in corporate insolvency numbers in the region over the next quarter.
“R3’s message to anyone worried about their finances is to seek professional advice as soon as concerns arise. It can be an incredibly hard conversation to have, but timely discussions with a qualified advisor may provide more options than waiting until a problem becomes more severe.
“Most R3 members will give prospective clients a free consultation so they can learn more about the issues they face and outline the potential options to resolve them.”
