CVLs Are On The Rise According To Recent Insolvency Statistics

Blue bar chart with upward arrow showing an increase

Every month The Insolvency Service releases their corporate insolvency statistics for the previous month. These assess the total number of company insolvencies for that month, as well as the number of Creditors Voluntary Liquidations (CVLs), and compulsory liquidations. These monthly figures are important for providing an insight into current challenges faced by the corporate sector, and the steps that business owners should be taking to protect their enterprises. 

So, what do the latest figures show?

On 16th August 2022, The Insolvency Service released their insolvency statistics for the month of July. The main point that we can take away from these figures is that the number of insolvency cases has increased since this time last year, and prior to the Coronavirus pandemic. 

The insolvency statistics show that the total number of company insolvencies in July of this year was 1,827. That’s 67% higher than July 2021, and 27% higher than pre-pandemic levels ( in July 2019). 

In addition to this, the figures revealed that the number of CVLs for July 2022 were 1,609. That’s 60% higher than in July 2021 and July 2019. This means that the current number of CVLs are higher than they were before the pandemic. 

It’s clear to see that the high number of insolvencies has been driven by a large number of CVLs , as a whopping 1,609 CVLs contributed to the total 1,827 insolvencies for last month. 

In short there has been an increase in company insolvency following the pandemic, driven by a rise in CVLs. What’s caused this increase? Well, this is likely to be down to a combination of factors. 

Due to the current economic climate, businesses have been under particular pressure. Inflation remains high, influencing consumer habits, whilst also putting pressure on supply chains and the cost of raw materials. 

In addition to the impact of the cost of living crisis, the economic effects of the pandemic are still continuing to hit businesses. An ongoing labour shortage is just one of the negative impacts continuing to impact companies, particularly small businesses. 

A combination of these factors has resulted in a turbulent economic climate with businesses facing an increasing number of challenges. This is reflected in the insolvency statistics, as more and more business owners are taking the decision to close their companies.

Christina Fitzgerald, president of insolvency and restructuring body R3, highlighted this in her response to July’s insolvency statistics, emphasising how the figures suggest that “a growing number of company directors are choosing to close their businesses, perhaps because they believe that the current economic conditions make survival impossible”, adding that “things are only set to get harder this year, so it is more important than ever that anyone running a business knows where to go to seek advice about their finances.”

So, what should you do if you’re concerned about your company?

If your company is struggling at the moment, the latest insolvency statistics show that you’re certainly not alone in this. If your company is in any kind of financial distress, it’s crucial to take action as soon as possible, by seeking advice from a qualified professional. A licensed insolvency practitioner will be able to assess if your company is in fact insolvent, and advise on the best course of action from there, whether that’s recovery or closure. 

Acting quickly will provide you with a greater number of options, and so don’t waste time in seeking help now. Our experienced team of insolvency practitioners at My Liquidation are on hand to talk through any concerns you may have. Please don’t hesitate to give us a call or drop us a message at a time that suits you.

Contact Us

I'm looking for more information on ...


Choose from the options below