UK businesses face greater pressure as company insolvencies continued to rise, with the Insolvency Service reporting a 32% increase in failures in December 2022 compared to December 2021.
According to the latest figures from the Insolvency Service, 1,964 company insolvencies were registered in December 2022, a 32% increase on those registered in December 2021 (1,489). This is a 72% increase compared to December 2019. (pre-pandemic)
Recent statistics also show that 183 Compulsory Liquidations took place in December 2022, more than three and half times higher than the numbers reported in December 2021. This is also 8% higher than Compulsory Liquidations as reported in December 2019.
The significant rise in Compulsory Liquidations can be partly attributed to temporary insolvency measures ending in March 2022 and an increase in winding-up petitions presented by HMRC.
What the company insolvencies figures mean for businesses
In response to the recent figures, Dean Nelson, Business Recovery and Insolvency Partner at PKF Smith Cooper, commented: “With rising interest and inflation rates, the insolvency figures for December demonstrate the increasingly painful trading conditions that UK businesses continue to face.
“At PKF Smith Cooper, we are continually seeing businesses succumb to financial pressure and cash flow difficulties, exacerbated as a result of the economic challenges experienced over the past three years, with an increasing number of company owners desperately trying to keep their businesses afloat. This has resulted in a nationwide growth in insolvencies.”
“For businesses facing financial difficulties the time to act is now. Through an independent business review, we can assist businesses higher up the decline curve by gaining a clear understanding into the reasons for their distress, under performance and cash flow difficulties. This results in greater options available to preserve and protect the business and its assets, without necessarily the need for formal insolvency proceedings to be instigated.”
Dean Nelson, Business Recovery and Insolvency Partner, PKF Smith Cooper
How PKF Smith Cooper can help
When it comes to financial difficulty, prevention is always better than cure. Seeking help at the earliest opportunity is essential to help mitigate the long-term impact of financial difficulty on your business.
This is where we can help.
At PKF Smith Cooper, we understand that the causes for financial distress are different for each business. Our dedicated business recovery and insolvency experts provide tailored financial advice and will work closely with you to find a solution where options may appear limited.
If your business is struggling with financial pressures, get in touch with us today. Our team of accredited business recovery and insolvency practitioners has extensive experience in helping companies like yours to recover.