HUGE INCREASE IN CORPORATE INSOLVENCIES
Released On 5th Jul 2023
The Insolvency Service has revealed that company insolvencies in England and Wales in May jumped almost 40% year-on-year to the highest level since monthly records began in January 2019. The month-on-month figure also rose by more than 50%, suggesting that three years of economic turmoil are taking their toll.
According to Insolvency Service figures, 2,552 companies entered an insolvency process over the month, mainly through creditors’ voluntary liquidations (CVLs), which is when the Directors of a business agree to wind up the business without a formal court order.
At the same time however, there was also a 34% year-on-year increase in compulsory liquidations from historical lows seen during the coronavirus pandemic, partly as a result of an increase in winding-up petitions presented by HM Revenue & Customs (HMRC).
Meanwhile, for individuals, 617 bankruptcies were registered, which was 5% higher than in May 2022, and around half of pre-2020 levels. In addition, there were 2,505 Debt Relief Orders (DROs) in May 2023, which was a year-on-year increase of 23%.
On a quarterly basis, there were on average, 6,767 Individual Voluntary Arrangements (IVAs) registered per month in the three-month period ending May 2023, which is 14% lower than the three-month period ending May 2022.
While the year-on-year figure for corporate insolvencies was higher, the total number of insolvencies decreased by 5% compared to April 2023. At the same time, personal insolvencies decreased by just over 5% in May this year compared with May 2022.
For help and advice on related matters, please contact our Restructuring and Insolvency Partner, Richard Warwick, today.
