What happened in April, May and June?

We’re past the halfway stage of the year and into August when a lot of people take some time to recharge, relax and recuperate ahead of another tough year. 

Unfortunately if you’re a director or business owner then even if you’re not in the office or home working space, you’re never really taking time away from the important business of actually running your company. 

It’s a great chance to look at how the year has gone so far and see what progress has been made against business plans or targets and see what needs to be done to meet them or continue to exceed them in the remaining five months of 2022. 

It’s also the time of year when we get the official Q2 corporate insolvency statistics for 2022 from the Insolvency Service which means we get a snapshot of how the year is going from a broader perspective and the news, we’ll it’s not great. 

During April 1 and June 30 this year there were 5,629 company insolvencies. This is 13% higher than the preceding quarter and 81% higher than in the corresponding quarter a year ago. 

The headline figure was comprised of 4,908 creditors voluntary liquidations (CVL); 368 compulsory liquidations; 320 administrations; 32 company voluntary arrangements (CVAs) and one receivership appointment. 

The number of CVLs is now at its highest quarterly level since records began in the 1960 and while the number of compulsory liquidations also increased, it is still lower than pre-pandemic levels. 

Company Voluntary Liquidations (CVLs)

In the latest quarter, CVLs made up the vast majority of company insolvencies with 87% of all cases. 

This was also 13% higher than the previous quarter and 74% higher than the same quarter in 2021. 

The total of 4,908 is the highest quarterly total recorded since quarterly records began in 1960. 

The Insolvency Service are keen to point out that the huge increase in CVLs between Q2 2021 and Q2 2022 coincided with the phasing out of Covid business support measures such as the furlough scheme, bounce back loans and the suspension of wrongful trading liability which allowed directors to continue trading without facing the threat of personal liability which ended on June 30 2021. 

Compulsory liquidations

The number of compulsory liquidations for Q2 2022 was 368. This is 9% higher than in the previous quarter and nearly four times higher (261%) than the same period a year ago although the numbers remain below their pre-pandemic levels. 

This is most likely due to support measures put in place mainly but not solely including temporary restrictions on the use of statutory demands and certain winding up petitions – which could lead to a compulsory liquidation in some circumstances.

These measures were first tapered before being ultimately ended on March 31 2022. 


The number of administrations in Q2 2022 was 320. This is 18% higher than in the previous quarter and 95% higher than the same period last year. 


There were 32 CVAs recorded between April and June this year which is 28% higher than in the previous three months of 2022 and also the same period in 2021. 

There was also one receivership appointment in Q2 2022 and from their inception in June 2022 to June 2022 there have been 39 insolvency moratoriums obtained and 12 companies have had restructuring plans registered at Companies House. 

When it comes to the individual sectors of the economy, every single industry saw an increase in the number of insolvencies in the four quarters ending in Q2 2022 compared to the same four quarter period preceding it. 

The industries with the highest number of insolvencies during the previous 12 months were:

  • Construction – 3,665 annual insolvencies
  • Wholesale & retail trade including repair of motor vehicles and motorcycles – 2,544 annual insolvencies
  • Accomodation and food service activities – 2,206 annual insolvencies

“The current economic headwinds are only likely to get worse before they get better”

Christina Fitzgerald, President of R3 – the insolvency and restructuring trade body, said: “The figures today are significant because they show the highest levels of corporate insolvency since 2012. 

“This has been driven by an increase in all forms of insolvency process but creditors voluntary liquidations (CVLs) have peaked to their highest ever recorded figure suggesting that many directors are opting to close their business as they lack confidence in their trading prospects in the current climate. 

“The steady rise in Compulsory Liquidations we’ve seen since the start of the year also suggests that creditors are now making use of their power to issue winding-up petitions to try and claw back monies they are owed. 

“Despite May’s unexpectedly positive GDP figures, these statistics show that now is not the time to be complacent about the state of the economy. 

“The current economic headwinds are only likely to get worse before they get better, and this will mean UK businesses will have a tough second half of the year.

“With household disposable income dropping for the eighth consecutive month in June, consumers are having to prioritise household bills before they can think about spending their money elsewhere and this will have a knock-on effect to businesses that simply won’t see the footfall they are used to.

“This, coupled with a combination of soaring costs across the board, supply chain issues, and a tight labour market, has meant an uphill battle for many businesses, especially for those still reeling from the pandemic.

“For company directors concerned about their prospects in the months ahead, now is the time to make sure they have a clear plan in place for the future. The economy is particularly fragile at the moment and businesses should be prepared for this to deteriorate as we enter the second half of the year. 

“We would urge company directors to understand how to spot the first signs of business distress and to seek advice from qualified professionals as soon as they become concerned

“Doing so will give them more time to think about the future of their business and more options to turn their financial situation around.”

Could your company survive a downturn? A Business Viability Review will tell you and a lot more

Some businesses hesitate to take action until they get clear evidence and feedback rather than rely on instincts and anecdotes. 

This is a sensible strategy and now we have the evidence of the first six months of this year all of the signs align to point to a worsening situation for UK businesses. 

We can see inflation rising, energy bills about to reach previously unheard of levels, higher staff costs, falling consumer confidence and disposable income and now we can add the highest number of voluntary liquidations on record to the already comprehensive picture. 

The brightest silver lining to the gathering storm clouds is that there is still time to act and make necessary changes to defend and strengthen the financial position of a business before it’s too late and circumstances dictate what options are available. 

By making an appointment for a free initial consultation with an expert advisor now, directors and business owners can make good use of this valuable period to find out what they can do to help their business survive and then thrive in the remaining months of 2022 and hopefully the months and years ahead. 

But only if they can take the right action, right now.