Top Service News
Company insolvencies up 30% in the last Quarter of 2022
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Latest quarterly figures from the Insolvency Service have shown that the number of company insolvencies across all sectors in England & Wales increased by 30%, compared with the previous year.
After seasonal adjustment, the number of business insolvencies in Quarter 4 (Q4) 2022 was 7% higher than in Q3 2022 and 30% higher than in Q4 2021.
The increase appears to have been partly driven by the number of Creditors Voluntary Liquidations which accounted for 82% of all company insolvencies. These occur when the directors of a company appoint a licenced insolvency practitioner to formally close down their insolvent company. They usually do this as a result of pressure from creditors. The number of court ordered Compulsory Liquidations also increased to the highest quarterly number since the start of Covid, partly as a result of an increase in winding-up petitions presented by HMRC and due to a high number of petitions from a single bank.
The figures between 1st October and 31st December 2022 show that there were 5,995 (seasonally adjusted) registered business insolvencies, comprising of 4,891 creditors’ voluntary liquidations, 720 compulsory liquidations, 359 administrations and 25 company voluntary arrangements.
Emma Reilly, Credit Management Specialist and MD of Top Service Ltd says of the construction sector,
“Output is still relatively strong as 2023 gets underway although many experts are forecasting that output will fall later in the year, particularly in house-building. The nature of the construction industry means that one insolvent main contractor can bring down dozens of smaller sub-contractors and suppliers so the sector is vulnerable in that respect”.