Corporate insolvencies have shot up by more than a fifth compared with last year, according to the R3 trade body for restructuring and insolvency professionals in Berkshire.
The rise from 2,032 in November 2022 to 2,466 for the same month this year, an increase of 21.3%, has been was revealed in newly published figures for England and Wales.
R3’s analysis of the data from The Insolvency Service also found that corporate insolvencies were at their highest annual total since 2009.
For 2023 so far, the figure stands at 23,153 – already outstripping 2022’s total of 22,129 with a month of the year still remaining.
Neil Stewart, chair of R3’s Southern and Thames Valley region, including Berkshire, said: “The monthly and year-on-year rise in corporate insolvency levels is driven by an increase in both Creditors’ Voluntary Liquidations, as more directors choose to close down their businesses while that choice is still theirs, and Compulsory Liquidations, as creditors vigorously pursue debts they are owed as they attempt to balance their own books.
“But the figures also take 2023’s corporate insolvency figures to the highest annual total since 2009.
“The fact that corporate insolvency numbers have reached a 14-year high is partly because of the Covid hangover, which was a result of insolvency numbers being supressed by Government support measures, but also as a result of a relay of economic issues that have taken their toll on businesses.”
R3 has urged directors and owners to seek help at the earliest possible opportunity if signs of financial distress occur rather than procrastinating until the new year.
Neil, who is regional associate director at insolvency litigation financing company Manolete Partners, added: “This point of the year is a critical time for many businesses in Berkshire.
“If it doesn’t deliver the rise in revenues many are hoping for, we could see insolvency numbers increase further in the coming months.
“Given the timing and climate, it’s vital that directors and managers in Berkshire are alert to signs of financial distress and seek advice when they appear, from a qualified and regulated source.
“It’s a hard conversation to have, but seeking advice at an early stage will provide more options for improving the situation and more time to make a decision about moving forward.”
The monthly and yearly falls in personal insolvency numbers were due to a drop in the number of people entering a bankruptcy or an Individual Voluntary Arrangement (IVA).
Most R3 members will provide a free consultation to prospective clients so they can learn more about their circumstances and outline the options for improving them.
