The latest report issued by the Insolvency Service on 17 December 2021 shows that for the first time since the start of the Covid-19 pandemic, company insolvencies registered in November 2021 were higher than the same period in 2019.

The 1,674 company insolvencies were notified, 88% higher than November 2020, (891 insolvencies), when several sectors of the economy were largely shut down and 11% higher than November 2019 when there were 1,509 insolvencies.

Although there are a number of insolvency procedures that can be utilised by directors, (Administration and Company Voluntary Arrangement), it is noteworthy that of the total number of cases, there were 1,521 creditors voluntary liquidations, 90% of the all insolvencies.

These numbers may not come as a surprise as it has been widely predicted that, as business support and subsidies were reduced or withdrawn, the levels of debt incurred over the past months would be unsustainable for many companies.

In addition, the levels of staff absence as a result of the new Omicrom variant must have become be a cause of concern. Government departments are being asked to plan for an absence rate of 25% in the coming weeks and if that number is reflected in the wider economy, will this exacerbate the problems already being faced by directors and business owners? The answer to that question remains to be seen.

In view of the issues affecting businesses, directors need to make a realistic assessment of company finances and viability going forward. There are steps that can be taken to deal with creditors, both trade and Crown, but the possible options reduce as debts remain unpaid or possibly continue to grow.
If your business is struggling and creditor pressure is increasing, now is the time to seek advice professional advice. As a licensed insolvency practice, T H Financial Recovery offers free, professional and confidential advice, either over the telephone or by video link over Zoom. Please do not hesitate to call 01282 332222 or email for a confidential chat and to start a dialogue to reduce the worries and stress caused by debt or cash flow issues.
Source: Insolvency Service