3 Things To Know From July 2023’s Monthly Insolvency Statistics

graphs illustrating financial statistics

Here at My Liquidation, we pride ourselves on our ability to keep UK businesses informed about the current market and economic landscape. One of the ways we do this is by providing insights into the key statistics that may affect you and your business.

One of the main sets of statistics to be aware of is the monthly insolvency statistics report from the Insolvency Service. This report details the noteworthy numbers when it comes to insolvency, liquidation and administration in the UK. The latest insolvency statistics have now been published and to help you understand them, here are the three key things to know from July 2023’s release.

Total Number Of Company Insolvencies Is Less Than July 2022

At first glance, the standout figure from this month’s insolvency statistics is that the total number of registered company insolvencies was 1,726. This figure is particularly notable because it is 6% lower than the comparable numbers reported in July 2022. One of the key factors contributing to this decrease in overall company insolvencies is the fact that fewer businesses entered into Creditors’ Voluntary Liquidation (CVL) compared to July last year. CVL is the process whereby company directors decide that closing down the business is the best course of action when insolvent.

Compulsory Liquidation Levels Have Increased

In contrast, compulsory liquidations increased significantly when compared to July 2022. 248 compulsory liquidations were reported in July of this year, a figure that is 8% higher than the same month last year. This notable increase can be attributed to a rise in the number of winding-up petitions issued by HMRC, as well as an overall increase in the number of compulsory liquidations following the historic lows of the COVID-19 pandemic.

Insolvency Figures Still Up On Pre-Pandemic Levels

Much like the data reported last month, total company insolvency levels are still higher than those seen both during and prior to the COVID-19 pandemic. A number of factors contribute to this. Firstly, government support measures are no longer in place and many businesses are finding that they are struggling to pay back now-due Bounce Back Loans. Secondly, the UK economy continues to face challenges as a result of supply chain issues as well as high inflation, causing many businesses to experience struggles when juggling supply and demand.

Understanding These Statistics

While the overall year-on-year reduction in company insolvencies is a positive sign for businesses trying to navigate the tricky current economic environment, it’s important to situate these statistics within the context that insolvency numbers are still higher than pre-pandemic levels.

Nicky Fisher, President of R3, the UK’s insolvency and restructuring and trade body, explains why this is the case in her commentary on July 2023’s monthly insolvency statistics. She emphasises that “costs are rising at a time when people are cutting spending back, leaving businesses facing the challenge of squeezed margins and shrinking revenues.” Though fewer businesses have responded to these challenges by pursuing a Creditors’ Voluntary Liquidation, Fisher stresses that “numbers are still well above pre-pandemic levels as the economic issues continue to bite businesses.”

As economic challenge continues in the UK, it’s vital that any business feeling concerned speaks to a licensed insolvency practitioner as soon as possible. With years of experience in dealing with all of the insolvency processes, you can count on the team here at My Liquidation to provide you with honest and useful advice. Don’t hesitate to get in touch today to start the process of working out the best way to proceed if your business is struggling.

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