Highest monthly figures in Scotland and Northern Ireland for half a decade too.
The temperature is rising outside and has been matched by the latest corporate insolvency figures released by The Insolvency Service.
The figures for May 2025 show a monthly total of 2,238 business insolvencies for England and Wales last month. This is a 15% monthly increase from the 2,053 recorded in April and an annual increase of 8% from the same month a year ago.
This is the highest monthly total recorded since June 2024.
Overall monthly company insolvency figures in the first five months of 2025 are slightly higher than they were in 2024 and at a similar level to those seen in 2023 – which saw a 30-year high annual number of business insolvency cases.
Analysis
Of the 2,238 corporate insolvencies recorded in May, the most frequent type were Creditors’ Voluntary Liquidations (CVLs) with 1,734.
This is an 11% increase on the number of voluntary liquidations recorded in April and an annual increase of 13% from the same month in 2024. This is also the highest monthly total of CVLs in a 12-month period.
CVLs made up 77% of all corporate insolvencies recorded in May, a 2% increase from the ratio from the previous month.
There were a total of 354 compulsory liquidations recorded in May. While this was a 7% reduction in the number recorded last month, this was the highest monthly figure seen in ten years so could be expected to an extent. It is an annual increase of 32% from the same month a year ago and is also higher than the 2024 monthly average.
2024 saw the highest level of compulsory liquidations in a decade with an annual increase of 14% from the year before. This continued the increase seen from record low levels in 2020 and 2021 when restrictions were applied on the use of statutory demands and some winding-up petitions which can lead to compulsory liquidations.
The figures have continued to climb in the first five months of 2025 as HMRC continues to crack down on companies with outstanding corporation tax, VAT, PAYE and National Insurance (NICs) arrears, with more resources being allocated to them and more staff being recruited to investigate and take action.
There were 136 administrations in May which was 28% higher than the previous month and 12% more than those seen in May 2024. In 2024, the number of administrations increased by 2% from 2023 and was slightly higher than the annual totals seen from 2015 to 2019.
Administrations have continued to increase since 2022 from the 18-year-low seen during the pandemic in 2021.
The number of Company Voluntary Arrangements (CVAs) in May 2025 was 42% lower than in April 2025 and 26% lower than in May 2024. Numbers remain low compared to historical levels. CVAs are not seasonally adjusted due to low volumes.
In 2024, the number of CVAs was 9% higher than in 2023 and over 80% higher than in 2022, which saw the lowest ever annual total in the time series going back to 1993. Despite this increase, the number in 2024 was slightly less than 60% of the 2015 to 2019 annual average.
There were no receivership appointments made in May nor were there any restructuring plans or insolvency moratoriums recorded by the high court. Since June 2020, 61 companies had obtained insolvency moratoriums to successfully pause legal action from creditors while they restructured financially while a further 37 had their restructuring plans registered at Companies House as required under the Corporate Insolvency and Governance Act 2020.
The company liquidation rate in the 12 months to May 2025 was 53.0 per 10,000 companies which is one in 189 companies equivalent to entering insolvency.
This is slightly up from last month when it was 52.5 per 10,000 or one in 190 companies in insolvency.
Rolling insolvency rates are calculated as a proportion of the total number of companies on the effective register and are more comparable over a longer period of time than absolute numbers which can be prone to short term fluctuations.
Scotland
In Scotland last month there were 133 company insolvencies – the highest monthly total for more than five years.
This was a 13% increase on the annual total from a year ago and was 32 more cases than a month ago. This is also the fourth month in succession when Scottish insolvencies totaled over 100.
May’s total was 56 CVLs (up from 47 in April); 72 compulsory liquidations (up from 51) and five administrations (up from three). There were no CVAs or receivership appointments.
One thing to note about Scotland’s insolvency regime is that it is partly devolved.
The Accountant in Bankruptcy (AiB), Scotland’s insolvency service, administers the Register of Insolvencies which is a publicly accessible statutory register regarding the insolvency of individuals and businesses in Scotland including company liquidations and receiverships.
Between June 26th 2020 and May 31st 2025, there were three restructuring plans and one moratorium in Scotland. Both procedures were created by the Corporate Insolvency and Governance Act 2020.
Scotland had always traditionally seen more compulsory liquidations than any other kind of insolvency process but CVLs overtook them in April 2020 and had remained higher until March 2025. This is the third consecutive month when compulsory liquidations have been higher.
The total insolvency rate in Scotland in the 12 months to May 2025 was 51.8 per 10,000 companies on the effective register. This was down by 1.6 from the preceding 12 months ending in May 2024.
Northern Ireland
In May there were 53 company insolvencies registered in Northern Ireland, a 20% annual increase than in May 2024 and 23 higher than last month’s total.
It was the highest monthly total in the province for over five years.
The total was 33 compulsory liquidations (up from 14 last month); 13 CVLs (up from 11); six administrations (up from two) and one CVA (down from three). There were no receivership appointments.
Between June 26th 2020 and May 31st 2025 there was one moratorium in Northern Ireland and no restructuring plans.
The total insolvency rate in the 12 months to May 2025 in Northern Ireland was 36.4 per 10,000 companies on the effective register. This was a decrease of 3.9 from the 12 months to May 2024.
The total number of company insolvencies for the whole of the UK in May 2025 was 2,424 – a monthly increase of 240.
Tom Russell, Vice President of R3, the UK’s insolvency and restructuring trade body said: “The monthly increase in corporate insolvencies is due to an increase in CVLs and administrations and the yearly increase is due to a rise in the number of companies entering these processes and an increase in compulsory liquidations.
“The climate remains very tough for businesses. We’re seeing this reflected in the number of directors who are actively taking steps to wind-up their companies and the number of creditors who are turning to the courts to pursue the debts they’re owed – led by HMRC who are attempting to recover money for the public purse.
“Ongoing economic and geopolitical issues are also being reflected in the insolvency numbers. We expected April would be difficult for firms following the introduction of the new National Insurance and National Minimum Wage rates and the issues around US tariffs and the economic contraction that took place reflects the impact these and other issues had on business and the economy.
“Challenges like these do not go away overnight and May was another tough month for businesses in England and Wales as a result of these issues and the ongoing costs of materials, staff and energy as inflation remains above the Bank of England target, all of which affected businesses and business planning.
“The uncertainty around the US tariffs continues to create a number of challenges for businesses and has made medium and long-term planning more difficult as businesses are forced into a more reactive, short-term mindset. While progress has been made around the tariffs and the adjusted rates are good news for a number of industries, the fact remains that costs will increase compared to what they were a year ago, and a number of other details relating to the tariffs have still yet to be agreed.
“Closer to home, businesses are still feeling the pinch of the increases in National Insurance and National Minimum Wage with many forced to raise prices, reduce staff or cut bank on expansion to manage the additional costs these have brought.
“This is going to potentially create wider economic issues in the long-term as firms are forced to batten down their hatches to survive after years of dealing with increases in costs and cautious consumer and client spending.
“Although the latest figures show construction output grew, the sector still faces issues with margins, costs and payment, while the retail and hospitality sectors have been affected by poor consumer spending over the last month.
“Retail and hospitality businesses will be hoping for a long, hot summer to encourage people to go out and spend money, and businesses in both sectors have reacted to the rise in wage costs by following the wider trend of freezing recruitment and not replacing people who have moved onto other jobs, and in cutting hours for casual staff where they can.”
If you want any more signs about the direction of economic travel for the rest of 2025 then these figures will underline it.
The highest monthly figures in England & Wales for a year and in Scotland and Northern Ireland the highest for five years show that rising compulsory and voluntary liquidations are only liable to increase.
Many directors are acting now by getting professional insolvency advice so they can implement changes to their companies if viable or bite the bullet and begin voluntary insolvency proceedings so they can maintain elements of control over the whole process.
If you want to fully explore your potential choices this year then get in touch with us to arrange a free initial consultation with us.
No matter what your longer-term aims for the year – the sooner you know what you can do, the earlier you can implement the important decisions that can make 2025 a landmark year for you and your business.