Vehicle Repair Hardest Hit According to Insolvency Figures
10th May 2019Elizabeth Hughes0 Comments.4 minutesInformation
Latest statistics from the Insolvency Service show that insolvencies have risen in England, Wales and Scotland in Q1 2019. In the last year, 42 of every 10,000 companies in England and Wales have been liquidated.
In England and Wales, creditors’ voluntary liquidations and administrations all increased in Q1 2019. Company voluntary arrangements also rose, while compulsory liquidations decreased. Administrations increased to the highest level for 5 years.
Insolvencies were 6.3% higher than in Q4 2018 and 5.1% higher than the same quarter last year. This is the second highest underlying level of insolvencies in any quarter since Q1 2014.
In the 12 months ending Q1 2019, for every 10,000 active companies in England and Wales, 42.1 were liquidated. This is up slightly from 41.4 per 10,000 in Q4 2018.
Insolvency sufferers and surfers
The industry seeing the biggest insolvency increase was the vehicle repair sector. There were 67 extra cases compared to the 12 months ending Q4 2018. This was closely followed by:
administrative and support services (66)
accommodation and food services grouping (57)
Excluding bulk insolvencies, the highest number of new company insolvencies remains in the construction industry with 3,013 insolvencies.
However, some industries are riding out the wave. The arts, entertainment and recreation industry saw the largest decrease in underlying insolvencies, with 23 fewer cases compared to the 12 months ending Q4 2018.
Insolvency in Scotland
There were 275 company insolvencies in Scotland Q1 2019, representing a significant increase of 16.0% compared to the same quarter of the previous year.
This comprised 176 compulsory liquidations, 69 CVLs (Creditors Voluntary Liquidations) and 30 administrations. There were no company voluntary arrangements or receivership appointments during Q1 2019, but the majority of company liquidations in Scotland are compulsory. The lower rate of compulsory liquidations in England and Wales is probably due to the fee charged by the Insolvency Service for managing the initial stages.
Figures reflect ‘ongoing turbulence’
Responding to the statistics, Federation of Small Businesses (FSB) national chairman Mike Cherry, said that the high levels of insolvency—the highest since 2014—highlighted “the ongoing turbulence that small firms are now up against.”
“These latest figures show the immense strain that small businesses are currently under with rising employment costs, unfair business rates as well as significant uncertainty as a result of the Brexit process,” he said.
He welcomed the news that there was a fall of 8.9% in the number of self-employed individuals who suffered from bankruptcies in Q4 of 2018, but noted that this was still higher than the same period in the year before.
“The self-employed community, who are 4.8 million-strong, are still denied basic support in too many areas.
“SMEs are under the cosh more than ever and it’s time that action is now taken to prevent more businesses going insolvent in the future.”