The Insolvency Service has published its latest statistics revealing there were 1,783 registered company insolvencies, In England and Wales in February 2023, broken down as follows:
In February 2023, there were 158 forced liquidations, which is 32% less than in February 2020 but more than twice as many as in February 2022. Because of the increasing winding-up petitions filed by HMRC, the number of forced liquidations has climbed from the historical lows experienced during the coronavirus (COVID-19) outbreak.
Creditors' Voluntary Liquidations (CVLs) in February 2023 were 1,505, 59%, and 13% more than in February 2020 and February 2022, respectively. Compared to before the pandemic, fewer company voluntary arrangements (CVAs) and administrations were formed.
Figure 1: The number of registered company insolvencies in February 2023 was higher than in the same month last year, driven by higher numbers of CVLs and compulsory liquidations.
There were 580 personal bankruptcies, 63% and 3% less than in February 2020 and February 2022, respectively.
In February 2023, there were 2,083 Debt Relief Orders (DROs), 13% less than the pre-pandemic comparative month and 7% less than February 2022. (February 2020).
The three months ending in February 2023 saw an average of 5,627 Individual Voluntary Arrangements (IVAs) recorded each month, which is 12% less than the three months ending in February 2022 but equal to the three months ending in February 2020.
Figure 2: After a revision in eligibility requirements in June 2021, DRO numbers rose, but they have since stabilised below pre-pandemic levels. The number of bankruptcies has been below both pre-pandemic and 2020 norms. IVA figures in 2022 were higher than in earlier years.
Source: Insolvency Service
Compared to pre-pandemic levels, the total number of company and individual insolvencies was low from the beginning of the coronavirus (COVID-19) pandemic until mid-2021, partly due to government initiatives to assist businesses and people during this period.
The number of bankruptcies and debt relief orders for businesses has already surpassed pre-pandemic levels, but these statistics are still lower for individuals.
Dan Hancocks, CEO of CoCredo, says: “Many businesses in England and Wales are still dealing with challenges in the marketplace, and the regular Christmas and New Year shopping season did not provide them the bounce they may have been hoping for.
Families are still cautious about spending money on anything but basics since they worry about money and the economy. At the same time, labour costs and the cost of keeping the lights on give business owners sleepless nights.
SMEs need to stay alert and keep a watchful eye and be able to respond to any early warning signs that their business is in trouble and seek assistance. A company could be in crisis if it experiences cash flow issues, payment delays, and rising stock levels; the sooner directors seek help, the more options they have to address the problems they face."
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