The monthly insolvency statistics published by the Insolvency Service yesterday (15 September 2020) provides up to date information as to the numbers of companies and individuals affected by current economic conditions, largely, but not exclusively, as a result of the Covid-19 pandemic.
The above graph illustrates the last 12 month’s figures, the most obvious decline being in the number of creditors’ voluntary liquidations (CVLs). In the period September 2019 to March 2020, (restrictions coming into place in late March 2020, the average number of CVLs was 981 per month. In comparison, the monthly average for the period April to August 2020 was 699, a reduction of 29%.
Although the numbers are smaller, the biggest change was in the number of compulsory liquidations, the the average number of cases September 2019 to March 2020 being 233 whilst this average reduced to 89 in April to August 2020, a drop of some 62%.
The Insolvency Service attributes the likely reason for these changes being to be measures put in place by the government to financially support business during the pandemic and the temporary prohibition on the use of statutory demands and certain winding up petitions from 27 April – 30 June 2020, this being further extended to 30 September 2020 under the Corporate Insolvency and Governance Act.
It clearly remains to be seen what will happen in the coming weeks and months if the planned reductions in the support measures are implemented and businesses are faced with need to commence repayment of “bounce back loans” and arrears of HMRC liabilities for VAT, PAYE and Corporation Tax. Further information will be posted as the current uncertainties are clarified.
In the meantime, please do not hesitate to contact us on 01282 332222 or info@thfr.co.uk should you have any query.