The Insolvency Service released their latest monthly corporate insolvency figures for December 2023 recently which means we now have a full (not seasonally adjusted) set of data for 2023 as a whole. 

We can now compare the year in full to the previous four years and get a clearer picture of how 2023 compared to the last non-pandemic year of 2019 and subsequent years. 

All UK business insolvencies

YearInsolvenciesPercentage change (on previous year)

Figures from The Insolvency Service – England & Wales, Scotland and Northern Ireland

The biggest increase we saw was from 2021 to 2022 when all pandemic support methods were finally removed. This saw a 57% rise in insolvencies although 2023 continued this trend with a 14% increase on 2022. 

There were almost twice as many business insolvencies in 2023 as there were in 2020 and 2021. 

There are several reasons why but a combination of increased interest rates, stubbornly high inflation, high energy and materials costs along with acute skills and labour shortages in various sectors have all contributed. 

We can also examine what has happened on a more detailed level with individual insolvency processes to indicate what is happening on a more granular level.

Compulsory Liquidation

YearCompulsory liquidationsPercentage change (on previous year)

Compulsory liquidations are when a business is forced to close down by a court, usually via a statutory demand or winding up petition for outstanding unpaid debts of as little as £750.

They were suspended between 2020 and 2021 as part of the government’s business support measures but removed entirely in 2022 which saw a huge increase in cases. 

The fact they have continued to grow by almost half in 2023 shows that creditors, led by HMRC are being more aggressive in their efforts to recover debts including forcing companies into liquidation to recover whatever value they can. 

Creditors Voluntary Liquidations (CVLs)

YearCVLPercentage change (on previous year)

Creditors Voluntary Liquidations (CVLs) are the most frequent insolvency process in the UK with over 75,000 company directors deciding to close their businesses and retain an element of control in the process over the past five years. 

The Covid-19 affected years of 2020 and 2021 saw predictable contractions in the numbers due to restrictions, support such as bounce back loans and staff furloughs to enable businesses in the worst hit sectors such as hospitality a path forward. 

Since these were lifted in 2022 there was nearly a 50% increase in the number of CVLs and this continued to grow in 2023 to the highest annual level seen since the great recession of 2008. 


YearAdministrationPercentage change (on previous year)

Administration is a formal insolvency process that unlike liquidation, doesn’t seek to close the company down. 

An external administrator takes over the running of the company from existing management temporarily to see if the company can be rescued and restructured.  Alternatively, they could arrange the sale of the business as a whole to new owners with a minimum of disruption to allow it to continue to operate. 

Administrations reduced in the first two years of the pandemic before recovering in 2022 and 2023 with continued rises.  They have yet to recover to their pre-pandemic levels yet but if they continue to grow at their current rate should hit that milestone in 2024. 

Company Voluntary Arrangements (CVA)

YearCVAPercentage change (on previous year)

A Company Voluntary Arrangement (CVA) is a formal agreement between a company and its creditors to repay a proportion of total outstanding debt in regular monthly instalments usually in return for a further proportion of it being written off. 

Once the remaining debt has been repaid, the business emerges from the CVA debt free and ready to continue trading. 

CVAs saw an annual reduction for four straight years from 2019 to 2022 but 2023 saw a recovery with a 65% increase to 207.  

Many directors will have grasped the nettle and decided to close their business with a CVL or other liquidation method but a CVA provides a viable way for a business to continue trading while dealing responsibly with any outstanding debts. 

The fact more directors and business owners are opting for one and trying to keep trading shows that even in tough economic conditions, there can be narrow paths through tough times. 

Chris Horner, Insolvency Director with BusinessRescueExpert, said: “There’s always a lag between worsening economic conditions and rising insolvencies as directors do everything in their power to keep their businesses afloat. 

“With growth forecast to be sluggish in the first half of 2023, assuming we aren’t in a technical recession too, this will further impact companies finances even if their outlook improves for the second half of the year. It still might not be enough for some firms. 

“Sometimes this isn’t enough, which we can see with rises in compulsory liquidations and CVLs. With CVLs reaching a 15-year high, it underlines how tough things are and we’ll see which sectors have been worst affected next month as the individual industrial sector data runs a month behind the main figures. 

“But there is encouragement to be taken from the big increases in administrations (25%) and CVAs (65%). This shows that more directors are willing to try to explore every avenue available to keep their businesses going and think that restructuring and recovery is a more sustainable option than closure. 

“It might be the case that the business is too insolvent to be saved and it might ultimately be liquidated after being in a CVA or administration, but these processes are all designed to be used by directors when they are most appropriate and relevant for their situation.”

You can be forgiven for not being able to remember what happened 12 months ago but 2023 started quite sedately with a dip in the monthly number of insolvencies, as there tends to be historically. 

We then saw the busiest year for corporate insolvencies out of the previous 15 so these first few weeks can’t be the most accurate indicator of what the next 11 months will hold. 

Better to act on a strategy proven to provide the most realistic options for a director or business owner to improve their situation. 

Get in touch with us to arrange a free initial consultation with one of our advisors at a convenient time for you. 

Once they get a clearer idea of the unique circumstances the company faces, they will be able to talk through the choices available to directors depending on their ultimate goals for the business – whether they would like to restructure and re emerge stronger than before or if they have decided that it’s time to close the book on one adventure and finish things efficiently before beginning the next one. 

No matter what their ultimate aim, they will have a clear roadmap to reach it but only if they take the first step and contact us.