Company Voluntary Arrangements also increased last month
Just as a thunderstorm will clear the air after a prolonged stuffy, warm period; so the latest set of corporate insolvency figures released by The Insolvency Service will provide business owners and directors with some respite.
The figures for June 2025 show a monthly total of 2,043 business insolvencies for England and Wales last month. This is an 8% reduction from the record high 2,238 recorded in May and is 16% lower than the total from the same month a year ago.
To provide additional context, monthly company insolvency numbers in the first six months of 2025 are running slightly higher than they were in 2024 and are at a similar level to those seen in 2023 – which saw the highest annual number of business insolvencies for 30 years.
Analysis
Of the 2,043 corporate insolvencies recorded in June, the most frequent type were Creditors’ Voluntary Liquidations (CVLs) with 1,585.
This is an 8% decrease on the number of voluntary liquidations recorded in May and a reduction of 18% from the same month in 2024.
CVLs made up 78% of all corporate insolvencies recorded in June, a 1% increase from the ratio from the previous month.
There were a total of 332 compulsory liquidations recorded in June. While this was a 6% reduction in the number recorded last month, this was still an annual increase of 13% from the same month a year ago.
The figures have continued to remain elevated in the first six 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 111 administrations in June which was 18% lower than the previous month and 35% lower than the same month a year ago. Annually the number of administrations increased by 2% last year from 2023 and was slightly higher than the annual totals seen in 2015 and 2019.
Administrations have continued to increase since 2022 and from the 18-year-low seen during the pandemic in 2021.
The number of Company Voluntary Arrangements (CVAs) in June 2025 was 7% higher than the previous month but 35% lower than in June 2024. Numbers continue to remain low compared to historic levels as CVAs are not seasonally adjusted due to relatively 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 the 60% average seen from 2015 to 2019.
There were no receivership appointments made in June but there were two restructuring plans and one insolvency moratorium recorded by the high court.
Since June 2020, 62 companies had obtained insolvency moratoriums to successfully pause legal action from creditors while they restructured financially while a further 39 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 June 2025 was 52.4 per 10,000 companies which is one in 191 companies equivalent to entering insolvency. This is down slightly from last month when it was 53 per 10,000 companies (one in 190 companies).
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 105 company insolvencies, which although elevated is 4% lower than the total a year ago and 28 fewer than last month’s total which was the highest monthly total for more than five years.
This is also the fifth month in succession when Scottish business insolvencies totaled over 100.
June’s total was made up of 62 CVLs (up from 56 in May); 37 compulsory liquidations (down from 72); five administrations (no change) and one CVA (up from zero). There were no receivership appointments.
Scotland’s insolvency regime 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 June 30th 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. CVLs have once again become the most frequent form last month but this overturns a three-month trend when compulsory liquidations have been higher.
The total insolvency rate in Scotland in the 12 months to June 2025 was 51.6 per 10,000 companies on the effective register. This was down by 0.2 from the preceding 12 months ending in June 2024.
Northern Ireland
In May there were 25 company insolvencies registered in Northern Ireland, a 47% annual increase on June 2024 but 28 lower than last month’s total of 53, which was the highest monthly total in the province for over five years.
The total was made up of 14 compulsory liquidations (down from 33 last month); seven CVLs (down from 11); three CVAs (up from one) and one administration (down from six). There were no receivership appointments.
Between June 26th 2020 and June 31st 2025 there was one moratorium in Northern Ireland and no restructuring plans.
The total insolvency rate in the 12 months to June 2025 in Northern Ireland was 37.5 per 10,000 companies on the effective register. This is a decrease of 2.6 from the 12 months to June 2024.
The total number of company insolvencies for the whole of the UK in June 2025 was 2,173 – a monthly decrease of 251.
Tom Russell, Vice President of R3, the UK’s insolvency and restructuring trade body said: “The number of corporate insolvencies fell in June, reaching their lowest level for this month since 2022. The yearly decline has been driven by a drop in the number of Creditors’ Voluntary Liquidations (CVLs) and administration, alongside a slight fall in Company Voluntary Arrangements (CVAs).
Whilst a single month of data does not indicate a long-term trend, it may signal that some directors are holding back from taking formal action for now, either due to improvements in trading conditions or in the hope that the summer months bring significant boost.
“Compulsory liquidations, however, have risen compared to June last year and remain significantly above pre-pandemic levels. This reflects a growing willingness among creditors to pursue debts through the courts-led by HMRC, which continue to take a more assertive approach to recovering money for the public purse.
“Whilst a fall in formal corporate insolvencies is welcome, the broader economic mood remains subdued. Businesses and households alike are low in confidence and as a result key decisions are on hold as a “wait and see” attitude is adopted.
“With GDP growth declining, for the second month in a row in June and unemployment levels recently increasing, it remains to be seen whether this negative economic trend will continue.
“Uncertainty around tariffs continues to be a concern. Whilst the recent UK/US trade agreement is a welcome development for some exporters, it is not a transformative deal of the wider economy. Speculation about tax increases in the autumn is also adding to the sense of uncertainty.
“For business owners trying to plan, hire and invest, not knowing whether or when further cost increases are coming makes decision-making more difficult. Many feel stuck in limbo – unable to move forward confidently without a clearer view of what lies ahead.
“This lack of confidence is playing out across several key sectors. Retail sales fell sharply in May as consumers pulled back on non-essential spending, while significant job losses in the hospitality sector point to mounting financial strain, with staff cuts often a last resort for businesses trying to stay afloat.
“Increases to the National Minimum Wage and National Insurance have intensified financial pressures, causing many firms to leave vacancies unfilled. Many will be hoping for a strong summer, but there is no guarantee that better weather and increased footfall will be enough to tip the balance.
“Construction output fell in May and businesses on the ground are reporting a slowdown as house prices growth levels off. Some of that oversupply reflects landlords leaving the market as a result of legislative changes, but the broader issue is one of weakening demand and low confidence.
“In a buyer’s market, developers will be reluctant to build into falling prices and for a sector that already works on tight margins, that hesitation is adding real pressure.”
The reduction in monthly insolvency figures will bring some relief but it remains the fifth month in succession when the total number of corporate insolvencies are over 2,000.
Many directors are getting professional insolvency advice so they can implement vital changes to their companies if viable or they can begin voluntary insolvency proceedings if necessary to maintain elements of control over the whole process rather than wait for creditors to act through winding up petitions or compulsory liquidation.
If you want to fully explore the options available to you 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.