Key Takeaways
- Data reveals a rise in company insolvencies in England and Wales.
- June saw a 27% increase in company insolvencies compared to June 2022.
- Companies are grappling with rising interest rates, inflation, staffing pressures, and repayments on government loans.
Insolvency Rates on the Rise
The latest Insolvency Service data analysis shows a rising trend in company insolvencies in England and Wales, according to the Corporate Recovery team at Xeinadin Group. In June alone, there were 2,163 company insolvencies, marking a 27% rise compared to June 2022. The second quarter (Q2) of 2023 reported 6,403 company insolvencies, indicating a 7% increase from the previous quarter and a 16% surge compared to Q2 in 2022.
A Wave of Economic Challenges
Xeinadin’s corporate recovery experts attribute the upswing in insolvencies to a myriad of challenges that businesses currently face. The list includes rising interest rates, inflation, staffing pressures, repayments due on government bounceback loans, and stricter enforcement from HMRC.
Liquidations and Administrations Ascend
A significant proportion of June’s insolvencies were creditors’ voluntary liquidations, registering a 21% rise compared to June 2022. Other insolvency proceedings also showed an increase, with compulsory liquidations up 77%, administrations up 44%, and company voluntary arrangements up 75%.
Xeinadin’s Corporate Recovery Division
In response to the rising insolvencies, Xeinadin recently established a dedicated corporate recovery division that concentrates on the protection, rescue, and restructuring of businesses facing closure or struggling with debt repayment.
Alan Fallows, Director of Xeinadin Corporate Recovery, commented on the escalating situation: “The continuing increase in company insolvencies demonstrates the pressure cooker many businesses are in as a result of a perfect storm of rising interest rates, inflation across many key business costs from energy to labour, repayment deadlines for Covid-related loans, and more aggressive pursuit from HMRC.” Fallows anticipates the trend to persist as economic challenges continue to mount.
Xeinadin Group operates in over 130 locations across the UK and Ireland, providing more than 40 service lines to over 50,000 clients, predominantly small and medium-sized businesses and their owner-managers.
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