Insolvencies drop 15% in April

The number of registered company insolvencies in April 2023 was 1,685 according to official figures released today. This figure is 15% lower than the same month in the previous year (1,988 in April 2022). 

These figures are, however, higher than levels seen while the Government support measures were in place in response to the coronavirus (COVID-19) pandemic and also higher than pre-pandemic numbers.

There were 183 compulsory liquidations in April 2023, which is nearly twice the number in April 2022. 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.

In April 2023 there were 1,368 Creditors’ Voluntary Liquidations (CVLs), 23% lower than in April 2022. Numbers of administrations and Company Voluntary Arrangements (CVAs) were higher than in April 2022.

Commenting on the latest figures, Gareth Harris, partner at RSM UK Restructuring Advisory, said: “These latest insolvency figures show some welcome and anticipated news that we may be starting to see that overall insolvency numbers have peaked and will now start to fall back to more normal levels during 2023 (albeit still considerably higher than the Covid period). 

‘While we anticipate that shut down Voluntary Liquidations (CVLs) will reduce fairly significantly over 2023 we still expect that HMRC will continue to be more aggressive in its recovery actions, and therefore Compulsory Liquidations will remain relatively high.  We also anticipate that there will be a relatively long tail to the current economic issues for those businesses carrying high levels of debt, as the costs of such borrowing are increasing sharply.  This is likely to mean increasing numbers of restructuring processes, and potentially a rise in the level of administrations as part of a solution or rescue process.  Hard work by management teams, innovative solutions and creative funders will be required in combination to allow survival for these businesses carrying too much legacy debt.’