Corporate insolvencies are continuing to hit a year-on-year high, with a perfect storm of economic turmoil and increasing numbers of creditors pursuing debts pressurising company directors into closing their businesses voluntarily.
This is according to the Midlands branch of insolvency and restructuring body R3 and follows monthly statistics published this week by the Insolvency Service which show that corporate insolvencies in England and Wales increased by 32% last month (December 2022) to 1,964 compared to December 2021 (1,489), and by 76% in comparison to December 2019 (1,119), prior to the outbreak of the pandemic.
R3 Midlands chair Eddie Williams, a partner at PwC in the East Midlands, said: “The monthly corporate insolvency figures have increased compared to last year and three years ago due to rises in Creditor Voluntary Liquidations and Compulsory Liquidations.
“This means that many company directors are choosing to close their businesses, no longer willing to combat insurmountable economic challenges such as low consumer confidence, rising costs and requests for increased wages. Changes to legislation have also given greater powers to creditors to recover monies owed to them, contributing to a rise in the number of companies in compulsory liquidation.
“The beginning of the year is a critical period for many companies, and R3 urges anyone who is anxious about their business or personal finances to seek advice as soon as possible. While it is incredibly hard to voice financial fears, having that conversation with a qualified advisor as soon as problems arise could lead to better outcomes than waiting until they become more severe.
“Most R3 members will give an hour’s free consultation to potential clients to enable them to understand more about the circumstances of the business, and to outline the options available to help them improve their situation.”
