Insolvencies on the rise but below pre-pandemic levels

According to the latest Government statistics, there were 1,094 registered company insolvencies in July 2021, 13% higher than July 2020 (956), but 24% lower than the same month in 2019, before the pandemic (1,442).

Discussing the July 2021 corporate insolvency statistics for England and Wales, Meghan Andrews (pictured), Restructuring and Insolvency Partner at Azets, regional accountancy and business advisers to SMEs, says: "This increase in corporate insolvencies when compared to the same month last year is not surprising – July saw the lifting of the final lockdown restrictions and many businesses will have had to start making payments in relation to their BBLS and CBILS loans. We expect the number of formal insolvencies to continue to increase as furlough comes to an end and as the moratorium on winding up petitions is lifted at the end of September."

In July 2021 there were 1,007 Creditors’ Voluntary Liquidations (CVLs), which was similar to pre-pandemic levels. "While the overall number of corporate insolvencies has not yet returned to pre-Covid levels, the number of CVLs seen in July is in line with the numbers seen prior to the pandemic, which could be indicative that CVL numbers will shortly exceed pre-pandemic levels", says Andrews.

"As UK businesses try to find the new normal and government support initiatives come to an end, SMEs may be particularly vulnerable over the next six months", adds Andrews.

Azets Group

Azets is an international accounting, tax, audit, advisory and business services group, with 160 offices across the UK and Europe, over 6,500 employees and 600 Partners. In the UK, Azets is the largest regional accountancy and business adviser to SMEs and the 9^th largest accountancy business.