The Insolvency Service has published its monthly insolvency statistics for December 2022. These numbers show the number of UK insolvencies during the month and the percentages of forced liquidations, Creditors’ Voluntary Liquidations, administrations, and Debt Relief Orders.
The publication of monthly bankruptcy statistics is critical for offering key insights into the present status of the economy and the issues that small and medium businesses may have to face in the coming months.
Let’s look at the main takeaways from December.
December’s Company Insolvency figures
The number of registered company insolvencies in December 2022 was 1,964:
In December 2022, there were 183 compulsory liquidations, three and a half times the number in December 2021 and 8% more than in December 2019. The number of mandatory liquidations has risen from historical lows recorded during the coronavirus (COVID-19) epidemic, partly due to increased winding-up petitions filed by HMRC.
There were 1,659 Creditors' Voluntary Liquidations (CVLs) in December 2022, 22% more than in December 2021 and more than twice as many as in December 2019. The number of administrations and Company Voluntary Arrangements (CVAs) was lower than before the pandemic but increased from December 2021 to December 2022.
Figure 1: The number of registered company insolvencies in December 2022 was higher than pre-pandemic levels, driven by higher numbers of CVLs and compulsory liquidations.
December Bankruptcies, Debt Relief Orders, and Individual Voluntary Arrangements
Individual bankruptcies totalled 397, 13% fewer than in December 2021 and 64% fewer than in December 2019.
In December 2022, there were 1,979 Debt Relief Orders (DROs), 6% more than in December 2021 but 5% less than in the pre-pandemic comparative month (December 2019).
In the three months ending December 2022, 7,233 Individual Voluntary Arrangements (IVAs) registered each month on average, which is 9% more than the three months ending December 2021 and 26% more than the three months ending December 2019. Over the last year, IVA rates have fluctuated from roughly 6,300 to 7,800 per month.
Figure 2: Following a revision in DRO eligibility requirements in June 2021, DRO numbers climbed and have been consistent and slightly below pre-pandemic levels for the last year. Bankruptcies have stayed lower than before the epidemic and below the 2020 level. In 2022, IVA figures were higher than in prior years.
The number of company insolvencies was 76% higher than in December 2019 and 32% higher than in December 2021.
The increase in company insolvencies compared to December 2021 was driven by an increase in compulsory liquidations and CVLs. The increase in mandatory liquidations is partly a result of an increase in winding-up petitions presented by HMRC.
Of the 1,964 registered company insolvencies in December 2022:
How CoCredo Company Credit Report Agency can support you
Dan Hancocks MD of CoCredo, says: “As the end of the tax year approaches, many businesses rely on December and January to promote sales and profit growth. Unfortunately, a series of challenges, including abnormally cold and rainy weather, industrial strikes, and the economic shadow cast by COVID over the past three years, has delivered many small and medium-sized business owners another kick in the teeth.
For the most part, there is no end in sight any time soon - and business leaders are particularly concerned about the consequences of rising inflation and energy costs, combined with the added stresses of the cost-of-living crisis, which is likely to continue to eat away at their income for the rest of the year.”
Suppose you are concerned about the company's or suppliers' financial stability with which you do business. In that case, we can provide you with extensive UK and Ireland Company Credit report check that produce comprehensive, reliable, and vital business credit check information, giving you the confidence to protect your business from potentially damaging financial risks.
Our UK and International Monitoring service provide regular email notifications of any business changes (such as financial performance, payment history, county court judgments, etc.) for 12 months, allowing you to continuously track any changes and providing valuable insights into a company's financial performance so you can react proactively if necessary to protect your own business.
Why not take advantage of a company credit report service free trial? Contact us at 01494 790600 or email us for more information on our business credit check services that will reduce your credit risk and boost your cash flow and productivity.