The UK Insolvency Service reports today [18 April 2023] that the number of registered company insolvencies in March 2023 was 16% higher than in the same month a year ago.

This was also higher than levels seen while the Government support measures were in place in response to the Covid-19 pandemic, the Insolvency Service said.

There were 288 compulsory liquidations in March 2023 – more than twice the number in March 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 HM Revenue & Customs.

In March 2023 there were 2,011 Creditors’ Voluntary Liquidations (CVLs), 9% higher than in March 2022. Numbers of administrations and Company Voluntary Arrangements (CVAs) were also higher than in March 2022.

For individuals, 672 bankruptcies were registered, 2% higher than in March 2022, but less than half of pre-2020 levels.

At 3,383 in March 2023, Debt Relief Orders increased by 35% over the same period last year. Monthly DRO numbers may be volatile at present due to the introduction of new debt relief hubs in February, the Insolvency Service said.

There were, on average, 6,100 Individual Voluntary Arrangements (IVAs) registered per month in the three-month period ending March 2023, which is 14% lower than the three-month period ending March 2022.

The numbers provided were not seasonally adjusted, the Insolvency Service said.

Analysing the Involvency Service news, Nick O’Reilly, director of restructuring and recovery at accountancy network MHA, said he expects administrations to continue to climb this year as businesses face “a very challenging environment with meagre government support”.

“After recent warnings, UK business administrations have now risen to pre-pandemic levels,” O’Reilly said. “As businesses continue to face a perfect storm of high energy bills, increasing interest rates and detrimental inflation, alongside little to no government support, we should expect administrations to continue to rise in the months ahead.

“The government should want to avoid administrations increasing in the short term because of the impact this could have on markets and business confidence,” O’Reilly said. “However, given how underwhelming the Chancellor’s spring budget was in terms of business support, we have to conclude it’s a sad reality that high insolvency numbers are acceptable for the government who want to clear out the zombie companies and allow the fittest to survive.”

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