The number of registered company insolvencies in July 2023 was 1,727, 6% lower than the previous year's (1,831 in July 2022). However, this number is still higher than the pre-pandemic levels, despite being lower than those seen during the COVID-19 government support measures.
Though the number of company insolvencies in July 2023 was 6% lower than in July 2022, all other insolvency types were higher than in the same month last year.
Of the 1,727 registered company insolvencies in July 2023:
Numbers of compulsory liquidations have increased from historical lows seen during the coronavirus pandemic, partly because of increased winding-up petitions presented by HMRC.
Figure 1: The number of registered company insolvencies in July 2023 was lower than in the same month last year, driven by a lower number of CVLs.
Between April and June 2023, an average of 5,659 IVAs were registered monthly, a 26% decrease from the same period in 2022. The number of IVAs in 2023 has been lower than the record-high annual number of IVAs in 2022.
Additionally, 620 bankruptcies were registered for individuals, 14% higher than July 2022 but less than half of pre-2020 levels.
There were 2,667 Debt Relief Orders filed in July 2023, a 45% increase compared to July 2022. The monthly numbers of DROs between April and July 2023 were slightly higher than before 2020.
The number of bankruptcies in the first seven months of 2023 slightly exceeded that of the same period 2022 but remained less than half of pre-2020 levels. In July 2023, there were 495 debtor applications and 125 creditor petitions, marking a 14% increase in bankruptcies compared to July 2022. Debtor applications rose 7%, while creditor petitions soared 49%.
On average, 5,659 IVAs were registered per month in the three months ending July 2023, a 26% decrease from the same period in 2022.
Figure 2: Bankruptcy numbers have increased slightly since last year, while DRO numbers have increased. IVA numbers in 2023 have been lower than the record-high numbers in 2022.
Figure 3: DRO numbers in July 2023 were higher than in July 2022. Bankruptcies have increased slightly but remained lower than both pre-pandemic and 2020 levels.
Dan Hancocks, MD of CoCredo, says: “The fall in corporate insolvency levels is due to fewer businesses entering a Creditors’ Voluntary Liquidation. Corporate insolvencies remain high above pre-pandemic levels despite monthly and yearly decreases as economic struggles persist for businesses.”
As people tighten their belts and reduce their spending, businesses may have to make the difficult decision between absorbing cost increases or passing them on to customers, which can lead to squeezed margins and shrinking revenues.
As summer draws to a close, directors must stay vigilant for any red flags of financial distress and take prompt action. Seeking financial advice right away can open more options and provide additional time to assess the situation. Failing to act quickly, on the other hand, will only serve to limit your options. It's always best to stay ahead of the curve and take proactive measures to safeguard your company's financial stability.
If you are worried about the financial stability of the companies or suppliers you work with, we can provide comprehensive and reliable UK and Ireland Company Credit check reports. These reports contain vital information that can help you protect your business from potential risks.
We offer UK and International Monitoring services providing email notifications of business changes (e.g. financial performance, payment history, county court judgments) for 12 months. This allows you to track changes, gain valuable insights into a company's financial performance, and react proactively to protect your business if necessary.