Corporate insolvencies increased by nearly a third in December, according to R3, the trade body for restructuring and insolvency professionals in the South and Thames Valley.
The latest statistics for England and Wales revealed a 32% year-on-year rise in corporate insolvencies in December 2022 compared with December 2021 although they were down very slightly on November 2022.
The figures from The Insolvency Service showed that:
- Corporate insolvencies fell 3.25% in December 2022 to a total of 1,964 compared to November’s total of 2,029. They were 31.9% higher than December 2021’s figure of 1,489. They were 75.5% higher than pre-pandemic levels in December 2019 when there were 1,119 corporate insolvencies.
- Personal insolvencies fell by 20.4% to 8,339 in December 2022 compared to 10,473 in November. They were 1.3% lower than December 2021’s figure of 8,453, and 0.8% lower than December 2019’s figure of 8,406.
Garry Lee, chair of insolvency and restructuring trade body R3’s Southern and Thames Valley region, said: “The monthly fall in corporate insolvencies was driven by a fall in compulsory liquidation and administration numbers.
“However, corporate insolvencies have increased compared to last year and three years ago due to an increase in creditor voluntary liquidation and compulsory liquidation numbers.
“This is due to a combination of directors choosing to close their businesses and creditors chasing unpaid debts following changes in legislation as both ends of the supply chain remain squeezed by ongoing issues around consumer confidence, rising costs, and requests for increased wages.
“The main increase in compulsory liquidations is as a result of more winding-up petitions being issued by HMRC.
“December and January are critical periods for many firms, and these issues, combined with strikes, bad weather and the economic challenges the UK has faced over the last three years may have dealt a further blow to businesses and business owners.”
The monthly fall in personal insolvencies was driven by a drop in numbers across all types of personal insolvency processes, with Individual Voluntary Arrangement numbers being the most dramatic.
Garry, who is an associate sirector in the recovery and restructuring services department at professional services group Evelyn Partners’ Southampton office, added: “Anyone who is anxious about their business or personal finances to seek advice as soon as possible from a qualified and regulated source.
“Talking about your concerns about money is very hard, but being brave and having that conversation as early as possible will give you more options, more time to make a decision and potentially a better outcome than if you’d waited till the situation became more severe.
“Most R3 members will offer a free consultation to potential clients to allow them to understand more about their position and outline the options for improving it.”