Company administrations could drop: Baker Tilly
BT partner said number of insolvencies could drop
Accountancy firm Baker Tilly said it would not be surprised by another jump
in the number of company administrations when official insolvency figures are
released tomorrow.
Geoff Carton-Kelly, partner in the London restructuring and recovery team,
said the number of insolvencies could rise tomorrow, but the overall picture
points to an easing of insolvency numbers.
`We expect a slow down in the rate of increase of insolvencies quarter on
quarter, and it is possible that the total number could even be lower than Q1,’
he said.
`As banks, HMRC and landlords have been offering extended payment terms and
are generally supportive, struggling companies have effectively been offered a
lifeline to avoid them being pushed over the financial edge.’
He warned however that we could be faced with another spike in insolvencies
as government eases its support.
Turning to personal insolvencies, Carton-Kelly said bankruptcies and IVAs are
likely to continue their rise.
`What has become apparent is that there are a huge number of people, an
estimated 700,000, enrolling in debt management plans, who have been saved from
being added to the insolvency statistics,’ he said.
`Although it is clear that individuals now understand the urgent need to
manage their finances to avoid falling into bankruptcy, what remains open to
question is their ability to pay back their debts in the longer term.’
The government’s Insolvency Service will release its quarterly statistics on
insolvencies, tomorrow.