THE financial health of Scottish business is improving with corporate insolvencies falling, the latest Scottish insolvency statistics reveal.
The upbeat snapshot was revealed from the most recent quarterly figures compiled by Accountant in Bankruptcy (AiB), the body responsible for administering the process of personal bankruptcy and recording corporate insolvencies in Scotland, for the fourth quarter of 2015-16.
Out of a dozen sectors profiled, only oil and gas and manufacturing were deemed to have a higher than normal risk of insolvency.
Tim Cooper, chair of R3 in Scotland, the insolvency trade body said: “Corporate insolvencies are continuing their downward trend, and have fallen again this quarter. While we are seeing considerable distress in the oil and gas sector, many of these businesses are in a period of restructuring rather than going through formal insolvency procedures.
“Those businesses that were hardest hit by the downturn may have already been through an insolvency process, while the oil price has slowly started to recover. Unfortunately for many SME businesses both directly in the oil and gas sector, and the wider North East, it may be too late.”
On the Member’s Voluntary Liquidation (MVL) front, where the shareholders of a solvent company adopt a voluntary winding up resolution and appoint a liquidator to realise the assets of the business in order to distribute the proceeds to company members, were up by 88.4% in the latest quarter.
And since April 5, Entrepreneurs’ Relief is no longer available to those who sell or liquidate their company and then continue to undertake a similar trade or activity during the next two years.
The move was made to prevent business owners avoiding higher taxes on income or dividends by storing up funds in their company, going through a solvent liquidation and claiming Entrepreneurs’ Relief on Capital Gains before setting up a new company to carry on their work.
Personal insolvencies also fell in the first quarter of 2015/16. The AiB said that while subsequent quarterly increases have been followed by a further increase of 0.8% in this quarter, the number of bankruptcies awarded is aligned with the decreasing long-term trend”.
Partners at the insolvency firm Craig Povey and Kevin Murphy were appointed liquidators on 2 February
Three new partners and seven business restructuring advisers have been appointed to the new Preston office
Leonard Curtis Business Solutions Group has opened a new office in Glasgow – the first Scottish office for the professional services provider
Vernon Dennis of Howard Kennedy LLP explores recent and future challenges faced by the insolvency sector