UK Company Insolvency Statistics Round-Up: April 2024

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Business professionals should be well aware that the UK government releases a wide range of useful data on a regular basis. One such release is the monthly company insolvency statistics which are published by the Insolvency Service and provide details of company insolvency rates in any given month.

The most recent set of company insolvency statistics has now been published and these figures offer key insights into the current environment in which UK businesses are operating. April 2024’s report contains a lot of information including the number of liquidations and administrations as well as both month-on-month and year-on-year comparisons. To help you understand how this might apply to the performance of your own company, we have rounded up the key headlines in this article. 

Company Insolvency Numbers Have Increased

The standout headline from the latest company insolvency statistics is that the number of registered company insolvencies increased in April 2024. 2,177 company insolvencies were registered, including 300 compulsory liquidations, 144 administrations and 1,715 creditors voluntary liquidations (CVLs). Crucially, these figures were 18% higher than those reported in the previous month and 18% higher than those reported in the same month last year. 

These numbers may seem alarming, particularly after the decrease in company insolvencies reported last month. However, it’s important to note the context and the timing of this month’s release. CVL numbers are always typically higher at this time of year due to directors wishing to close their companies to coincide with the end of the financial year. The high CVL numbers also demonstrate that many struggling businesses are opting to take matters into their own hands and increase the chances of good outcomes for creditors when faced with insolvency, rather than waiting for a winding-up petition to be issued as a last resort by HMRC.

Company Numbers Are Still Increasing

As the cost of living crisis has escalated over the past year, many comparisons have been drawn to the 2008-09 recession. While the UK is not currently in recession, there is no doubt that times are tough and many businesses have closed as a result. This has naturally resulted in comparisons also being drawn with the latest company insolvency statistics. 

The key takeaway from this month’s report is that, despite being high, company insolvency rates are still considerably lower than the peak of the 2008-09 recession. This is because the number of companies on the Companies House register has more than doubled during this time, indicating that there is some degree of positivity among new businesses. While this slight lifting of the mood is certainly not grounds for businesses to be complacent, it does show that optimism is the flavour of the month – something we hope continues into the summer and beyond.

Are Rescue And Recovery On The Cards?

Adding to the feeling of optimism inherent in this month’s company insolvency statistics is the fact that both administration and company voluntary arrangement (CVA) numbers have increased. While these processes are still indicative of company insolvency, they point towards business rescue and recovery as opposed to closure. These figures could therefore again indicate that there is a greater sense of hope amongst struggling businesses, with greater potential for recovery as inflation steadily declines. 

The latest company insolvency statistics also highlight the importance of seeking help as soon as you feel like your business may be in trouble. Acting quickly will increase the likelihood of business recovery or, if liquidation is unavoidable, will at least mean that you have options to prevent a winding-up petition from being issued. 

Should you have any questions about the current state of play in the UK or wish to get advice about dealing with company insolvency in the most effective way, don’t hesitate to get in touch with our expert team. 

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