And while it’s important to continue to look ahead to a hopefully better and brighter 2022, we should understand what’s happened in the immediate past as a reliable guide to exactly where we find ourselves right now as an economy.
The latest official monthly company insolvency statistics have been published by the Insolvency Service and reveal the big news that not only have business insolvencies risen again but they have risen significantly.
The total number for England and Wales inclusively in November was 1,674 which was not only up by 16% (269) on the previous month but up a huge 88% on the same month last year and up 11% on November 2019 (pre-pandemic).
November was also the seventh month in a row where the number of corporate insolvencies was not only over 1,000 but also higher than the corresponding number for the same month a year ago.
Of the 1,674 company insolvencies, the clear majority remain Creditor Voluntary Liquidations (CVLs) with 1,521 being recorded last month.
This is an unusually high figure being 99% higher than a year ago and 43% higher than the pre-pandemic November 2019.
A closer break down of the figures reveals:
There were a total of 104 corporate insolvencies in Scotland in November, up 36 from the 68 recorded in October. This figure is 126% higher than a year previously and 18% higher than two years ago for the same monthly period.
The overall total was made up of 21 compulsory liquidations (12 in October), 76 CVLs (54 in October) and 7 administrations (up from 2 in October.) Once again there were no CVAs or receivership appointments this month, the same total as last month.
In Northern Ireland in November there were 9 company insolvencies recorded which was 5 fewer than in the previous month. This was also down 71% on pre-pandemic November 2019 but was up 29% on the same month in the province a year ago.
The total number was made of 2 compulsory liquidations, 6 CVLs and one administration. There were no CVAs or receivership appointments registered.
Overall, the total number of UK company insolvencies in November 2021 is 1,687 - up by 200 from October 2020.
“They feel survival is impossible in the current climate”
Christina Fitzgerald, Deputy Vice President of R3, the insolvency and restructuring trade body, said: “The monthly increase in corporate insolvencies has been driven by a rise in CVLs to their highest number in more than two and a half years.
“The increase in the use of this process suggests that a rising number of company directors are choosing to close their businesses, perhaps because they feel that survival is impossible in the current climate.
“Times are tough for businesses in England, Wales, Scotland and Northern Ireland as the pandemic continues to take its toll on the economy and the firms that drive it. Over the last few weeks businesses have been hit by the triple whammy of increased costs, supply chain issues and rising Covid-19 cases.
“They’ve also been operating in the face of low consumer confidence and anaemic economic growth in recent months, which, coupled with an increasingly difficult Covid-19 situation, has led to changes in people’s shopping and spending habits and taken its toll on revenue levels.
“It remains to be seen how the introduction of Plan B will affect the economy in the short and medium term, but we know it will affect footfall, spending and operations at a time when many businesses would have been hoping for a busy Christmas period to help after a challenging year.”
For the seventh month in a row, company insolvencies are now higher than they were a year ago and have not only reached pre-pandemic levels but surpassed them.
Meanwhile, thousands of small businesses from all over the country are battling against staff shortages, supply chain problems, pandemic restrictions, customer nervousness and for many, growing debt arrears.
If you have an outstanding bounce back loan, PAYE or VAT arrears or any other obligations that are getting harder or are impossible to meet, then you might be wondering how you can hope to remain open into 2022, let alone make a return to profit.
The good news is that there might be more than one solution to achieve this no matter how tough the present situation looks but only if you take the important first step and get in touch with us.
After your free initial consultation with one of our experienced advisors, they will be able to explain in plain English what you can do to improve your company’s chances with the various courses of action that are open to you.
They’ll also tell you if they think the business has a realistic chance of survival and if not, can explain various other courses of action about how it could be closed with a minimum of stress and fuss that would satisfy creditors and leave directors free to move onto their next venture without historic debts hanging over them.
Take your first step on the road to recovery today and by Spring you could be in a better position than you think today.