The number of registered company insolvencies in March 2023 was 2,457, 16% higher than in the previous year's (2,120 in March 2022), which is higher than levels seen while the Government support measures were in place in response to the coronavirus (COVID-19) pandemic and also higher than pre-pandemic numbers.
Of the 2,457 registered company insolvencies in March 2023:
In March 2023, there were 288 compulsory liquidations, more than double the number in March 2022. These have risen from historical lows witnessed during the coronavirus epidemic, partly due to increased winding-up petitions filed by HMRC.
In March 2023, there were 2,011 Creditors’ Voluntary Liquidations (CVLs), 9% higher than in March 2022. The number of administrations and Company Voluntary Arrangements (CVAs) was higher than in March 2022.
Figure 1: The number of registered company insolvencies in March 2023 was higher than in the same month last year, driven by higher numbers of CVLs and compulsory liquidations.
Sources: The Insolvency Service (compulsory liquidations only); Companies House (all other insolvency types)
Individual bankruptcies totalled 672, 2% more than in March 2022 but less than half of pre-2020 levels.
In March 2023, there were 3,383 Debt Relief Orders (DROs), which was 35% more than in March 2022.
In the three months ending March 2023, 6,100 Individual Voluntary Arrangements (IVAs) were registered each month on average, 14% fewer than in the three months ending March 2022.
Figure 2: DRO numbers may be volatile due to the introduction of DRO Hubs. Bankruptcies have remained stable since March 2022. IVA numbers were slightly higher in 2022 than in previous years.
There were 565 debtor applications and 107 creditor petitions among the bankruptcies. Over the last year, there have been 563 bankruptcies per month, which is 60% fewer than the 2019 (pre-pandemic) average of 1,395.
Bankruptcies were 2% greater in March 2022 than in March 2021. Debtor applications were 3% higher in March 2022, while creditor petitions were 1% lower.
In March 2023, the number of DROs was 35% more than in March 2022. Because of the introduction of new DRO hubs, DRO counts may fluctuate.
Figure 3: DRO numbers may be volatile due to introducing DRO hubs. Bankruptcies have remained lower than both pre-pandemic and 2020 levels.
Dan Hancocks CoCredo’s MD, says: Although the UK escaped an official recession, this has provided little comfort to companies, many of whom are still battling difficult economic conditions.
Due to inflation and slow consumer sales, businesses are struggling to find financing and repay their debts as a result of high-interest rates and the broader impact on cash flow. Therefore, business insolvencies will likely grow in the short term, making for an uphill battle in spring.
On a slightly brighter note, sectors such as hospitality and leisure that have taken a battering over the last few years may soon start to reap the benefits of improved summer weather, so we hope to see a decrease in the number of insolvencies in these sectors with increased footfall during these warmer months.
Our UK and International Monitoring service enables you to continually follow any changes and obtain an insightful understanding of a company's financial condition, allowing you to protect your business when necessary proactively. For the next 12 months, you will receive frequent email alerts from the service on any company developments (such as financial performance, payment history, county court rulings, and so on).
Why not take advantage of a free trial of a company credit report? Call us at 01494 790600 or contact one of our customer services team for more information on our corporate credit check services, which will minimise your credit risk and increase your cash flow and efficiency.
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