According to figures from the Insolvency Service, company insolvencies in England and Wales rose by almost 19% year on year in August 2023.  This keeps the level of corporate insolvencies above those recorded whilst Government support measures were in place and an eyewatering 69% higher than in the pre-pandemic month of August 2019.

There were 2,308 corporate insolvencies in August 2023, up from 1,728 in July, mostly accounted for by creditors’ voluntary liquidations (CVLs), whereby Directors agree to wind their business up without a Court order. There were 1,880 CVLs over the month, a rise of 13% on August 2022.

According to the Insolvency Service’s summary, construction retailers and manufacturing firms headed the list of sectors most affected by firms becoming insolvent.

The Insolvency Service also said that one of the biggest drivers of corporate insolvency was action by HM Revenue & Customs (HMRC), which has recently increased the number of winding up orders for unpaid tax.

Meanwhile, personal insolvencies increased by 3% in August to a total of 8,536 compared to July’s total of 8,290 but decreased by almost 11% compared to August 2022’s figure of 9,584.

The number of individual insolvencies consisted of 648 bankruptcies, 2,714 debt relief orders (DROs) and 5,174 individual voluntary arrangements (IVAs). According to the Insolvency Service, the lower number of individual insolvencies compared to August 2022 was driven by a decline in the number of IVAs. However, DRO and bankruptcy numbers were higher than last year.

Source(s): Insolvency Service