Compulsory and voluntary liquidations climbed significantly
While we’re enjoying a burst of sunny weather, the number of corporate insolvencies in Scotland was heating up too.
In the latest statistics compiled by the Accountant in Bankruptcy and released by The Insolvency Service, there were 133 company insolvencies – the highest monthly total for more than five years and the fourth month in succession when the monthly total saw more than 100 cases.
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.
The total number of company insolvencies for the whole of the UK in May 2025 was 2,424 – a monthly increase of 240.
Chris Horner, insolvency director with BusinessRescueExpert, said: “The latest rise in Scottish corporate insolvencies reflects the pressures many businesses are still under as fragile demand continues to combine with rising costs.
“Even with further interest rate cuts on the horizon in August, insolvency levels are likely to stay elevated for some time yet, particularly for firms that are carrying unsustainable levels of debt.
“Sectors like hospitality and tourism are entering what should be some of their strongest trading months but with continued cost pressures – including the increases to employers’ National Insurance Contributions and the rise in the National Minimum Wage – many operators are struggling to maintain their margins.
“A strong summer could offer some respite but with footfall and consumer spend remaining unpredictable, directors need to act early, assess their position critically and take advice before options start to narrow.”
If you want any more signs about the direction of economic travel for the rest of 2025 then these figures will underline it.
Many Scottish 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.