Jump in compulsory liquidations year-on-year

In addition to this, four times as many creditors’ voluntary arrangements (CVAs) took place in the month, while there was a 53% increase in administrations when compared to July 2022 – going up to 124.  

Reflecting on the jump in liquidations, Azets’ head of restructuring Colin Haig said: “The long-term trend in business failures will continue to tick upwards despite the total number of insolvencies dipping last month – but most concerning is the number of compulsory liquidations.  

“Liquidation is an end-of-life process and too many business owners are failing to react quickly enough to signs of distress, leaving them unable to take advantage of more constructive options.” 

However, the overall number of company insolvencies that took place were lower year-on-year – dropping by six percent to 1,727. This was mainly due to the 17% drop in creditors’ voluntary liquidations (CVLs), going down to 1,336.  

ReSolve managing partner Mark Supperstone said: “These statistics clearly demonstrate that conditions remain challenging with rising interest rates proving detrimental for both businesses and consumers coupled with the economic bugbears of inflation and stagnant growth.  

“Unfortunately, these challenges are not contained within a few sectors; we are seeing businesses ranging from sports and leisure, retail and technology approaching us with a multitude of corporate issues that urgently need addressing. 

“In particular, we are seeing rising enquiries relating to HMRC issues and CBILS loans that are coming to an end causing problems for companies, specifically those looking to refinance. The fact that CVAs and administrations were up significantly in July suggests that businesses are seeking a rescue rather than simply closing, which is what we were seeing earlier this year.  

“As is often the case, if problems are dealt with early then creative solutions can often be found to rescue businesses and save jobs. The uncertain economic climate is likely to continue, and it will be the companies that plan effectively that will be able to trade through this testing period.” 

Turning to the personal insolvency figures, there were 620 bankruptcies in England and Wales in July. A 14% jump when compared to July 2022, these were made up of 495 debtor applications and 125 credit petitions – up seven percent and 49% year-on-year respectively. 

Reflecting on the year as a whole, bankruptcy numbers in the first seven months of 2023 were slightly higher than during the same period in 2022 – but remained less than half of the pre-2020 levels.  

As for debt relief orders (DROs), this hit 2,667 in July 2023 – 45% higher than during the same month last year. Looking at the year as a whole, DRO numbers were volatile in the early part of the year at the time of the introduction of new DRO hubs and are now slightly higher than pre-2020 levels.  

Additionally there were, on average, 5,659 individual voluntary arrangements (IVAs) registered per month in the three-month period ending July 2023 – 26% lower than during the same period the previous year.    

In Scotland, 97 company insolvencies were registered – 41% higher than in July 2022 – comprising of 44 compulsory liquidations, 51 CVLs and two administrations.  

Meanwhile, between 26 June 2020 and 31 July 2023, no moratoriums were obtained and two companies and had a restructuring plan registered at Companies House in the country.

In Northern Ireland, 13 company insolvencies were registered in July 2023 – seven percent lower than during the same period in 2022. This was comprised of eight CVLs, three compulsory liquidations and two CVAs.  
As for individual insolvencies, 108 took place in the month – 33% lower than in July 2022. This consisted of 83 IVAs, 16 DROs and nine bankruptcies.