Corporate insolvencies continue to decline

Corporate insolvencies continue to decline

Quarter on quarter figures see drop in troubled companies

Corporate insolvencies in the UK have dropped for the second quarter
running, according to the latest statistics from the
Insolvency
Service
.

The latest figures for Q4 2009 saw 4,566 insolvencies including
receiverships, administrations and company voluntary arrangements (CVA).

For the year 2009 there was a total of 19,077 corporate insolvencies,
compared with just 15,536 for 2008.

The Insolvency Service breakdown shows that receiverships, administrations
and CVAs represented a 39.7% decrease on the same period a year ago on a
non-seasonally adjusted basis.

“The slight reduction in the level of company insolvencies is due to
businesses developing strategies for dealing with the recession and the more
tolerant attitude of the Revenue,” said Alan Tomlinson partner at Tomlinsons.

“The flip side is that many of the businesses we deal with are accruing
substantial liabilities to the Crown, which is only storing up problems for the
future. Given the Government’s requirement for funds, this tolerant approach is
unlikely to last and pressure from the Revenue is likely to result in a second
wave of failures during the course of the year,” he added.

He is not alone in this thought process. Andrew MacCallum, managing director
at restructuring firm Alvarez & Marsal said: “We can expect that special
treatment from suppliers, landlords and the taxman will start to come to an end.
Banks will lose patience and reinstate demanding payment terms. Creditors are
more likely to send a company to the wall as assets are worth more in a growing
economy.”

Historically corporate insolvencies rise following the end of a recession,
however Barclays managing director, for business support and recoveries, Graham
Rusling, reassures companies that the banks will make a more “sophisticated
efforts” to keep companies trading.

Further reading:

Insolvency
stats show corporate liquidations drop

Liquidators
shut door on Designer Rooms

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource