What are the other key statistics this month?

They are now at their highest total since March 2020 according to the latest official monthly company insolvency statistics released by The Insolvency Service. 

The number for England and Wales inclusively last month was 1,446 – which has increased by 98 from 1,348 in August (up 7.2%) and is also 56% higher than the corresponding period of September last year when there were only 928 insolvencies recorded. 

The figure is now only slightly lower (4%) than the last pre-pandemic period two years ago when 1,510 were recorded in September 2019 but it appears to be only a matter of time until the numbers rise higher than this watermark. 

September 2021 was also the fifth consecutive month when the number of corporate insolvencies had been over 1,000 and were also higher than the previous year’s corresponding figure. 

Out of the 1,446 company insolvencies, the majority are Creditor Voluntary Liquidations (CVLs) which make up a huge 1,328 (91%) of the total number.

This is the highest number of CVL’s seen since January 2019 and has driven the overall number higher as the other types of company insolvencies such as compulsory liquidations have remained lower. 

Of the other recorded insolvencies this month there were 25 compulsory liquidations, 81 administrations and 12 company voluntary arrangements (CVAs). There were no receivership appointments. 

Analysing these results further can reveal more about the overall trends including:

  • 1,328 Creditor voluntary liquidations (CVL) – 80% higher than a year ago and 21% higher than September 2019
  • 25 Compulsory liquidations – 49% lower than September 2020 but 21% higher than 12 months previously
  • 12 Company voluntary arrangements (CVA) – 61% lower than this period last year and 45% down on the same period in 2019
  • 81 administrations – 26% lower than in September 2020 and 49% lower than September 2019

Additionally 14 companies obtained an insolvency moratorium between June 26 and September 30 2021 and nine companies had a restructuring plan registered at Companies House.

There were 70 corporate insolvencies recorded in Scotland in September, down from the 89 recorded in August. This is 63% higher than in September 2020 but 8% lower than the same period in 2019. 

This total comprised eight compulsory liquidations (11 in August); 52 creditor voluntary liquidations (down from 76 last month) and 10 administrations (up from 2 last month). There were no CVAs or receivership appointments. 

Compulsory liquidations used to be the main driver of Scottish company insolvencies but since April 2020 there have been more than twice as many creditor voluntary liquidations. 

In Northern Ireland there were 11 company insolvencies which is two more than the nine recorded in the province for August 2021. This was 10% higher than a year ago but 69% lower than the pre pandemic period of September 2019. 

This consisted of nine creditor voluntary liquidations, an administration and a CVA. There were no compulsory liquidations or receivership appointments. 

The overall number of UK company insolvencies for September 2021 is 1,527 which is up 81 from the 1,446 UK total from August.

“A rocky road ahead for the business community” 

Nicky Fisher, Deputy Vice President of R3, the insolvency and restructuring trade body said: 

“The latest statistics show the economic effects of the pandemic are continuing to take a toll on businesses and consumers. 

“The dramatic increase in corporate insolvencies compared to this time last year – to the highest level since January 2020 – illustrates just how crucial the Government’s support had been in keeping businesses afloat and suggests that there may be a rocky road ahead for the business community now it has ended.

“The monthly increase in corporate insolvencies was driven by a rise in Creditors’ Voluntary Liquidations, which increased for the third consecutive month. 

“This suggests that directors are choosing to close their businesses after deeming their financial survival unlikely after 18 months of trading through a pandemic. 

“Despite the fact that businesses have benefitted from two months of restriction-free trading and the economic boost over the summer, conditions are still not back to where they were before the pandemic. 

“Consumers are now increasingly cautious about the state of the economy, their personal finances and the increased cost of living and are more wary about spending their money. 

“And with widespread supply chain disruption and significant wholesale energy price increases building up between September and October, there is likely to be little slack in the system for businesses and individuals who have yet to get back on their feet following the impact of Covid-19.”

If you worry about being a statistic in future months – get some advice now

For a fifth month in succession company insolvencies are higher than they were in the same month a year ago and are quickly approaching the same or higher numbers than before the pandemic lockdowns began being enforced. 

Businesses now have to contend with a busy pre-Christmas trading period while the last of the Covid-19 support measures have been removed. 

Some, such as winding up petitions, remain with restrictions but as HMRC begins to get serious in clawing back outstanding bounce back loans, VAT and other tax arrears, it could be a bleak winter for those that don’t have a plan to deal with their liabilities and debts.

Fortunately, business owners and directors can arrange a free initial consultation with one of our experienced advisors quickly and at the most convenient time for them. 

They will work with them to understand what the most pressing financial challenges are and come up with a range of options and potential solutions that can be implemented usually quickly and effectively. 

But unless they take that first step towards survival and make contact, the situation might deteriorate quickly and decisively against them. 

Then the options they’ll have will have changed from what’s best to what’s the least worst.