The number of insolvent businesses in England and Wales has hit a four-year high, with company directors choosing increasingly to shut down their companies voluntarily.
This is according to the Midlands branch of insolvency and restructuring body R3 and follows statistics published [14/3/23] by the Insolvency Service which show that corporate insolvencies rose by 6% in February to 1,783 compared to January’s total of 1,682, and by 17.5% in comparison with February 2022’s figure of 1,518.
The government statistics also show that corporate insolvencies in England and Wales increased by 160.3% against February 2021’s total of 685, and by 32.6% compared to 1,345 in February 2020.
R3 Midlands committee member Stephen Rome, a director of Thursfields Solicitors in the region, said: “Corporate insolvency numbers are at their highest level in four years due a rise in Creditors’ Voluntary Liquidations. Numbers for this process exceed those for 2022, 2021, 2020 and 2019 as more and more directors are deciding to close their businesses.
“After nearly three years of lockdowns, supply chain issues, rising costs and falling revenues, many business owners have simply had enough, and are shutting up shop before they are forced to.
“Trading conditions remain tough in the region – and it seems like the traditional Christmas and New Year trading period didn’t give them the boost they needed to survive.
“People are still very worried about money and the economy and are reluctant to spend on anything other than the basics. At the same time, the costs of energy, fuel and wages continue to be a major concern for businesses.
“Now is the time for directors to be aware of the signs their company is struggling and to seek appropriate professional advice. Cashflow issues, payment delays and rising stock are all indicators of a business in distress. The earlier directors seek help, the more options are available to address the challenges they face.”
