NEW research has confirmed a link between the Brexit process and a rise in the number of insolvencies across Yorkshire and the North East, as well as the wider UK.

After reaching a decade low in 2015, insolvencies have risen by a fifth over the last three years.

According to insolvency analysts from the respected consultancy.uk website, this upward trend is likely to accelerate as Yorkshire and North East businesses prepare themselves for Brexit.

“The UK economy is on the brink of a perfect storm,” warned their insolvency researchers this week.

“Hiring intentions have cooled in 2019 as the country braces for the impact of Brexit – suggesting that the number of insolvencies may well spiral further upward over the coming 12 months.”

They go on to say: “The correlation between the number of insolvencies in the UK and the Brexit process have become impossible to ignore.”

Latest figures from the Insolvency Service revealed there were no fewer than 17,439 insolvency procedures in 2018.

Those sectors hardest hit by insolvency included  construction, admin, retail and manufacturing – which mirrors our own research from our insolvency teams working in Leeds, Bradford, Harrogate and Darlington.

While the number of company receiverships fell, other strands of insolvency saw heavy spikes, with companies leaving it too late to take business recovery action to stave off financial collapse.

The analysis highlighted that Company Voluntary Arrangements (CVAs) has plateaued to an extent.

Here in Yorkshire and the North East, as well as the rest of the UK, they have become a popular method of staving off administration in recent times.

This is because they allow embattled companies to avoid administration while offloading underperforming stores and reducing rent costs.

But consultancy.uk argued that this latter point seems to have become a sticking point for their use – as witnessed by House of Fraser in June 2018 – meaning their use only grew marginally in the year.

With up to 500,000 UK businesses in significant financial distress and facing insolvency,  it concluded that unless the situation improved drastically, the figures were likely lead to a boom in bankruptcy and restructuring service demand – even if only half of those firms are forced into insolvency proceedings.

And the continuing spectre of a muddled and extended Brexit only served to ramp up this growing insolvency threat to business.

“The sustained period of uncertainty that has impeded the performance of many UK businesses is all but guaranteed to persist,” it declared.

“While afterwards, highly challenging economic times seem to be on the horizon. At the same time, a hike in business rates, pension enrolment, and unsecured debt will all play a role in placing businesses under financial strain.”

It’s a scenario which will resonate with many businesses struggling with financial difficulties here in Yorkshire and the North East – underlining the importance of taking prompt action before the threat of insolvency looms large.

For more information about the work of our licensed insolvency practitioners and businesses recovery teams in Leeds, Bradford, Harrogate and Darlington, please call us on 03300  244 660 or email confidential@walshtaylor.co.uk

Mary Taylor
Director

Mary began working in insolvency for a national accountancy practice in Glasgow thirty years ago and worked in most divisions of the insolvency department.

She then moved to a smaller firm so she could advance her knowledge on a more hands on basis. She moved back to Leeds in 1987 and commenced working with a small firm of accountants and subsequently made partner.

She left in 1999 to set up her own practice, McCann Taylor.
McCann Taylor became involved with the consumer market both in England and Scotland.

Mary sold McCann Taylor in March 2007 and formed Walsh Taylor to concentrate on helping businesses experiencing financial difficulties.

Meg Heath
Director

Meg has a background in supporting SMEs, including the raising of finance and advising on organisational change. She is a non-executive director of companies in the private and third sector, including Walsh Taylor.

Previously she was Deputy Fund Director of one of the largest CDFIs in the UK, and has experience of the social enterprise, charity and private sectors. Her experience of assisting companies to survive and thrive has been gained across a broad range of sectors and in companies of all sizes.

In addition to her work at Walsh Taylor she works for other private companies, including non-executive and trustee positions.

Emma Mifsud
Insolvency Practitioner

After graduating from Leeds University in 2005 with a BA Hons degree in Criminology, Emma worked for a regional law firm in both the property department and insolvency and banking department. Whilst doing so Emma gained a Graduate Diploma in Law at BPP University.

Emma then joined a national accountancy firm in 2009 gaining experience in personal insolvency before moving to a Leeds based firm. At this firm Emma specialised in bankruptcies, IVA’s and negotiating informal agreements with creditors. In 2013 Emma gained her CPI qualification.

Since joining the firm in December 2013, Emma has taken on a portfolio of personal and corporate insolvency cases to extend her knowledge and expertise in all areas of insolvency.

In December 2017 Emma become a licensed appointment taker under the Insolvency Practitioners Association, she is JIEB qualified.

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