The monthly report from the Insolvency Service has been published, containing vital information about the number of individuals and companies currently experiencing financial difficulties and undergoing formal insolvency procedures.
In June 2023, there were 2,163 company insolvencies registered, which is a 27% increase from the previous year's number of 1,698 in June 2022. This number was higher than the levels observed during the pandemic when the government offered support measures and higher than the pre-pandemic figures.
Of the 2,163 registered company insolvencies in June 2023:
In June 2023, there were 260 instances of compulsory liquidations, which is a 77% increase from June 2022. The number of compulsory liquidations has increased from the unprecedented lows seen during the pandemic, partly because HMRC has presented more winding-up petitions.
In June 2023, there were 1,759 Creditors' Voluntary Liquidations (CVLs), a 21% increase from the previous year in June 2022. Additionally, there were more administrations and Company Voluntary Arrangements (CVAs) compared to June 2022.
Figure 1: The number of registered company insolvencies in June 2023 was higher than in the same month last year, driven by higher numbers of CVLs and compulsory liquidations. England and Wales, June 2019 to June 2023.
There were 2,320 Debt Relief Orders (DROs) in June 2023, 21% higher than in June 2022. Monthly DRO numbers between April and June 2023 were similar to pre-2020 levels.
The bankruptcies were made up of 521 debtor applications and 122 creditor petitions.
Bankruptcy numbers in the first half of 2023 were slightly higher than in the first half of 2022 but remained less than half of pre-2020 levels.
From April to June 2023, an average of 6,026 Individual Voluntary Arrangements (IVAs) were registered monthly. This is a 22% decrease compared to the same period in 2022. Furthermore, the numbers for the first half of 2023 were lower than those for the first half of 2022.
Figure 2: Bankruptcy numbers have remained stable since June 2022, while DRO numbers have increased. IVA numbers in 2023 have been lower than the record high numbers in 2022 England and Wales, June 2019 to June 2023.
Source: Insolvency Service
Figure 3: DRO numbers between April and June 2023 were similar to pre-2020 levels. Bankruptcies have remained lower than both pre-pandemic and 2020 levels.
Dan Hancocks, MD of CoCredo says: “It's not surprising that many companies are struggling due to the pandemic. Many of them were already heavily in debt before this happened. They must deal with higher borrowing costs, inflation, and the overall economic downturn. Consumers are also being more cautious with spending while prices keep rising, hurting their profits and margins.”
“Unfortunately, not all companies will be able to survive, especially those in industries that rely on direct consumer interaction. Directors are expecting costs and wages to keep going up throughout the year. If demand doesn't increase as well, it could be the final nail in the coffin for businesses barely hanging on.”
Our Monitoring service for UK and International companies enables you to stay updated with any changes in their financial performance, providing valuable insights to help protect your business. You will receive email notifications for a year regarding any developments, such as payment history, financial performance, and county court judgements, allowing you to take proactive measures if required.
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