The Insolvency Service has published Q3’s Insolvency Statistics Report for July to September 2017. The report looks at companies unable to pay debts, going into liquidation, entering administration, or experiencing any other company rescue process.
Let’s take a look at some of the key points from the report:
A rise in corporate insolvencies
Underlying corporate insolvencies rose by 15% from Q2 to Q3 in 2017, and are 15% higher than they were this time last year.
Worst affected sectors
Administrative and Support Services
In the twelve months ending Q2 2017, the administrative and support services sector saw the highest number of new company insolvencies, with 4,251 insolvencies. This was a 30% increase from the 12 months ending Q1 2017. The sector was particularly affected by one-off events following changes to claimable expenses rules which resulted in 1,796 connected personal service companies (PCSs) entering Creditors’ Voluntary Liquidation (CVL) in Q4 2016 and another 1,131 in Q2 2017.
The construction sector was also heavily affected, with 2,616 new company insolvencies in the 12 months ending Q2 2017.
Wholesale and Retail Trade
The third industry facing high instances of insolvency was the Wholesale & Retail Trade sector. This industry showed 2,139 new company insolvencies in the 12 months ending Q1 2017, which was a 2% fall compared to the 12 months ending Q1 2017.
Between them, these three sectors account for 50% of all company insolvencies.
What is causing the rise in corporate insolvencies?
Many businesses are feeling the financial strain due to challenges like:
- inflation increases
- a weak pound
- rising national living wage
- additional costs of pension auto-enrolment
- the rise in interest rates.
A lot of business owners are expecting a tough next few years, with many already trying work out what they need to be doing.
Help for you and your company
If your company has business debts which it is struggling to pay, you should seek help from your Accountant and/or a specialist firm of Insolvency Practitioners.
The sooner you start to deal with the situation, the better it will be for you.
For your free advice, contact Clarke Bell on 0161 907 4044 or [email protected]