Key Messages From The Latest Company Insolvency Statistics
Amidst the backdrop of the outcome of the recent General Election, the latest company insolvency statistics have been released by the Insolvency Service. These statistics, covering June 2024, offer insights related to insolvency rates in the UK. They provide detailed information on the exact number of company insolvencies in the specified month, including compulsory liquidations, Creditors Voluntary Liquidations (CVLs), administrations and Company Voluntary Arrangements.
The latest company insolvency statistics always provide valuable insights for UK businesses and this month’s release is no different, with comparisons to be drawn with data from the previous month and year. To help you stay informed, we have extracted the key messages from this Insolvency Service data in this blog.
Overall Company Insolvency Levels Have Risen
The overarching headline from June 2024’s insolvency statistics is that the number of registered company insolvencies in England and Wales has risen. 2,361 company insolvencies were registered in June 2024 which was 16% higher than the same figure reported in last month’s report and 17% higher than the same month last year.
High CVL numbers are the main reason for this across-the-board rise in company insolvencies. Creditors Voluntary Liquidation is the process used by insolvent companies to remove creditor pressure and wind up voluntarily before a possible winding-up petition can be enforced by HMRC. Its prominence therefore indicates that growing numbers of businesses are succumbing to financial pressures, but are trying to do so in a way that puts creditors interests first.
Compulsory Liquidation Levels Are High
Despite growing numbers of insolvent businesses turning to liquidation voluntarily, compulsory liquidation levels are still high. In fact, the latest company insolvency statistics illustrate that compulsory liquidation levels are at some of their highest levels since lows in 2021.
Compulsory liquidation is often deemed a last resort for creditors and therefore the reported high numbers indicate that creditors are currently not shy to take action when debts are not satisfied. Companies concerned about the possibility of their creditors taking a similarly firm stance in light of the latest company insolvency statistics should prepare accordingly and consider whether voluntary liquidation via a CVL is an appropriate next step. This form of liquidation, while also resulting in the closure of the company, delivers more favourable outcomes for creditors and gives directors more control over the process.
Use Of Business Rescue Methods On The Up
While the main messages from the latest company insolvency statistics largely feel full of doom and gloom, they do contain some positive signs for struggling businesses. Alongside compulsory liquidations and CVLs, the high overall company insolvency numbers also contain 170 administrations and 23 company voluntary arrangements (CVAs).
These formal insolvency processes are utilised when the appointed insolvency practitioner believes there is a viable chance of business rescue. While there is no guarantee that subsequent rescue attempts will be successful, the prominence of these processes in this month’s figures should offer some reassurance that recovery is possible within the current challenging economic landscape.
If you are a company director and concerned about the rising number of company insolvencies in the UK, you are not alone. There are a number of places you can turn to for advice, whether you are struggling to pay your debts or need to enter into a formal liquidation process immediately.
At My Liquidation, our licensed insolvency practitioners are on hand to help no matter what position your business is in. We can talk you through the different processes available to you and help you with your next steps no matter what outcome is the most suitable for you. Get in touch today to find out more.
