Recent figures show company insolvencies have hit a 5 year high
The latest figures released by the insolvency service show:
- Company insolvencies increased in Q2 2019 compared with Q1 2019 this was driven by an increase in creditors voluntary liquidations, Compulsory liquidations, administrations and company voluntary arrangements (CVAs) decreased in Q2 2019
- Company insolvencies, in Q2 2019, increased to 4,231 (2.6%) its the highest level since Q1 2014 in England and Wales and rose by 11.9% compared to Q2 2018. This was due to a rise in company voluntary liquidations of 6.9 percent compared to Q1.
The figures highlight a difficult period for UK Businesses with a number of reasons easily identified:
- Significant uncertainty about the future of the UK economy and the UK’s relationship with the EU
- Consumers are only buying what they need.
- Businesses in a variety of industries are struggling right now. Retailers are suffering as the world in which they operate changes and more and more people shop online.
- Manufacturing output and confidence is low.
- Private and business car sales are down.
- Businesses which stockpiled items ahead of the original Brexit deadline of 29 March will now be seeing those decisions have an impact on their cash flow levels.
Federation of Small Businesses (FSB) Policy & Advocacy Chairman Martin McTague, said “These latest figures are hugely concerning, highlighting the immense strain that small businesses are under with rising employment costs, business rates and sustained political uncertainty. The construction sector, notoriously dogged by late payments, has seen the biggest share of insolvencies, with more than 3,000 firms going under in the year ending in Q2.”
“Other labor-intensive industries – administration, hospitality and retail – are also suffering as they struggle with higher wages, pensions auto-enrolment costs and skills shortages. Our latest confidence index shows confidence within the construction, wholesale and retail sectors is in deep negative territory.”
Cashflow can be a major factor in any business’ situation and with the latest news released all businesses will be looking to make sure they can get the money they are owed in as quickly as possible.
We have a number of fact sheets that can help you update your processes internally which are free to download from our website.
If you feel you need more support, please get in touch and we can see how we can help you.
