Key Takeaways From October 2022’s Insolvency Statistics

Every month The Insolvency Service releases the latest statistics on UK insolvency rates. This contains up-to-date information on the number of individuals and companies that have become insolvent, and provides an insight into the wider economic factors that may be contributing to these insolvency figures. The insolvency statistics for October 2022 have been released in the past few days, providing some key insights for business owners to take away. The most important messages to take from the latest insolvency statistics are as follows:

Corporate Insolvencies Have Increased Since September 2022

In September 2022 there were 1,679 registered company insolvencies. In October 2022 this figure increased to 1,948. This increase was driven largely by an increase in the number of Creditors’ Voluntary liquidations (CVLs), of which there were 1,594. Alongside this, there were 242 compulsory liquidations, more than 4 times as many as in October 2021, alongside 107 administrations and 5 Company Voluntary Arrangements (CVAs). 

Corporate Insolvency Figures Are Higher Than Pre-Pandemic Levels 

Another key point to take away from October’s insolvency statistics 2022 is that the number of corporate insolvencies is higher than pre-pandemic levels. The number of registered company insolvencies for October 2022 was 38% higher than October 2021 and 32% higher than October 2019 i.e. before the pandemic.

The Increase Has Been Driven By A Rise In Compulsory Liquidations & CVLs

The insolvency statistics for October 2022 also show that the number of compulsory liquidations has been similar to pre-pandemic levels. In October 2022 there were 242 compulsory liquidations, more than 4 times the amount for the same month the previous year, and 2% higher than in October 2019. Alongside this, the number of CVLs for October 2022 was 28% higher than October 2021 and 53% higher than October 2019. 

Why Has The Number Of Corporate UK Insolvencies Increased?

There are a number of different factors leading to the increase reflected in the latest insolvency statistics . The end of temporary insolvency legislation, coupled with a lack of bounce back for some businesses following the pandemic is likely to have played an important role. In addition to this, the cost of living crisis will have had a huge influence.The soaring cost of fuel and energy has left many businesses struggling to pay their bills, while consumers have significantly reduced their spending habits as they struggle to pay their household bills. The combination of inflation and decreased consumer spending has left many businesses struggling to keep their heads above water. These pressures, coupled with concerns of an imminent recession have caused many business owners to take the decision to close their doors. It is uncertain how the Christmas trading period may impact business. For those in the hospitality sector, there are  hopes that an unseasonal football world cup may help with trading at this difficult time. 

What To Do if You’re Concerned About Your Company 

The most recent insolvency statistics reflect the challenges that many businesses are facing in the current economic climate. If you’re concerned about the future of your business, it’s crucial to seek the advice of a licensed insolvency practitioner as soon as you can. They will be able to advise you on the best course of action for you and your company in these challenging times. If your company is insolvent, then the best option may be to liquidate via a CVL. If the company is still solvent, however you are concerned about the future, you may choose to close your business via a Members’ Voluntary Liquidation (MVL), where you can extract assets in a tax-efficient way and claim statutory entitlements. It’s beneficial to take control of the closure of your company rather than allowing issues to escalate, with the potential of eventually being forced into compulsory liquidation. 

To discuss the options that might be available to you, please don’t hesitate to get in touch with our experienced team of insolvency practitioners at My Liquidation.