NEW figures have revealed a sharp increase in the number of businesses becoming insolvent in the first three months of this year.
The Insolvency Service reported that there were 4,187 company insolvencies in the quarter.
This represents is 6.3% increase in insolvencies compared to the final quarter of last year.
And put side-by-side with the same post-Christmas quarter last year, this shows a rise of 5.1%.
What’s more, these latest insolvency figures signal the second highest underlying level of insolvencies in any quarter for five years.
Insolvency analysts said the performance was a further red flag sign that businesses had struggled financially in the run-up to the original March Brexit deadline
This 2019 rise was driven by increases in Creditors’ Voluntary Liquidations (CVL), where shareholders of an insolvent firm take action to close their company. These soared by 6.2% compared to the previous quarter.
Administrations, when a company is placed under the control of insolvency specialists, such as Walsh Taylor, while rescue strategies are investigated, rocketed by no less than 21.8% to a five-year peak.
Company Voluntary Arrangements (CVA) also posted an eye-watering rise of 43.1%.
However, compulsory liquidations dipped in the first quarter by 2.7%.
The sector most at risk of entering the insolvency zone was the beleaguered wholesale and retail trade; while companies involved in the repair of vehicles witnessed the largest spike in insolvency ill-health.
Insolvency victims were also high in administrative and support services; manufacturing; and the accommodation and food services sector.
On the plus side, the arts, entertainment and recreation industry witnessed the largest fall in underlying insolvencies.
Looking at the whole of the past twelve months, the highest number of new company insolvencies remains in the construction industry with 3,013 insolvencies – up 0.6% compared to the previous period.
The Insolvency Service also reported that there were 31,527 individual insolvencies the first quarter of 2019 – 8.1% lower than last year’s comparative total. This was largely driven by a decrease in Individual Voluntary Arrangements (IVA).
There was also better news for the self-employed, who saw the number of bankruptcies drop by almost 10% compared to the previous quarter.
For more information about the work of our licensed insolvency specialists and businesses recovery teams in Leeds, Bradford, Harrogate and Darlington, please call us on 03300 244 660 or email email@example.com