Corporate insolvencies surge as firms struggle to survive harsh economic climate

There were 1,964 company insolvencies in December 2022, 32 per cent higher than the previous year and 76 per cent higher than the 1,119 registered in December 2019. 

Fladgate’s Jeremy Whiteson said the increase in insolvencies was “not merely a blip.”

“High fuel prices, inflation, labour shortages, post Brexit difficulties with international shipping, uncertainty in capital markets, raising interest rates and geo-political uncertainty all pose difficulties for businesses,” Whiteson said.

Numbers of compulsory liquidations have increased from historical lows seen during the coronavirus pandemic, partly as a result of an increase in winding-up petitions presented by HMRC.

There were 183 compulsory liquidations in December 2022, more than three and a half times as many as in December 2021 and eight per cent higher than in December 2019. 

The vast majority of company insolvencies, however, were Creditors’ Voluntary Liquidations.

CVL is a process which enables directors to close an insolvent company voluntarily. The level of CVLs was 22 per cent higher than in December 2021 and more than double the number in December 2019. 

Read more at City A.M.