But main underlying categories rise
In the final month of the financial year we’d expect many directors would be taking proactive measures to circumvent the changing financial landscape that begins with changes in April.
So it proved with the latest corporate insolvency figures released by The Insolvency Service.
The total number of company insolvencies for England and Wales in March 2025 was 1,992.
This was a slight reduction of 2% from last month’s total of 2,035 but 9% higher than the monthly total from a year ago.
Analysis
Of the 1,992 corporate insolvencies recorded in March, the most frequent type were Creditors’ Voluntary Liquidations (CVLs) with 1,543.
This is a 1% increase on the previous month’s total and is 8% higher than the same period 12 months ago.
CVLs make up 77% of all corporate insolvencies recorded in March, an increase of 2% from the ratio recorded in February.
CVLs have been increasing at a rate of approximately 10% between 2017 and 2019 before the pandemic and additional measures brought in by the government to protect businesses arrested in their growth.
There were a total of 295 compulsory liquidations recorded in March.
This was an increase of 5% from the previous month but a reduction of 24% from the same period a year ago. This was the joint third highest monthly total in the previous 12 months.
2024 saw compulsory liquidations at their highest levels since 2014 having increased annually by 14%. This was an increase from the record low levels seen in 2020 and 2021 while restrictions applied to the use of statutory demands and winding-up petitions (which lead to compulsory liquidations).
HMRC are continuing to crack down on companies with 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.
This will see the continued use of statutory demands and winding up petitions which will continue to keep the number of compulsory liquidations high.
There were 137 administrations in March which was a 17% increase on February’s total and a 30% increase from the same month a year ago. Administrations have now recovered to their pre-pandemic levels after failing to 18-year-lows during the Covid affected year of 2020.
17 Company Voluntary Arrangements (CVAs) were recorded in March which was a 143% increase on last month’s total and an 89% increase from March 2024. CVAs have recovered to approximately half of their pre-Covid levels but there is still headroom to expand even further.
CVAs and administrations are attractive for several reasons to directors because of the additional options and legal protections they bring that enable them to not only reduce outstanding debts but restructure their business and finances rather than look to go straight to liquidation.
There was one restructuring plane recorded in March with no receivership appointments or moratoriums recorded.
Since June 2020, 60 companies have obtained an insolvency moratorium to successfully pause legal actions from their creditors while they financially restructure while a further 36 companies had their restructuring plans registered at Companies House as required under the Corporate Insolvency and Governance Act 2020.
According to the monthly rolling data taken from the Companies House register, one in 188 companies (at a rate of 53.1 per 10,000) entered insolvency between 1 April 2024 and 31 March 2025. This was an increase from the previous rolling 12 month total.
The Insolvency Service produces these 12-month rolling rates calculated as a proportion of the total number of active companies which they say highlights longer term trends and is designed to “tune out” any one-off or monthly volatility.
Scotland
In Scotland last month there were 118 company insolvencies, a 3% increase on the total from a year ago and 15 more cases recorded than a month previously.
This was also the joint highest monthly total in the previous 12 months.
March’s total was made up of 57 compulsory liquidations (up from 38); 55 CVLs (down from 60) and six administrations (up from five). There were no CVAs or receivership appointments recorded.
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 March 31st 2025, there were three restructuring plans and one moratorium in Scotland. Both of these procedures were created by the Corporate Insolvency and Governance Act 2020.
Traditionally Scotland has seen more compulsory liquidations than any other kind of insolvency process but CVLs overtook them in April 2020 and had remained higher ever since until this month – the first month the positions had reverted.
Many Scottish directors and their accountants are continuing to take difficult decisions early enough to give them control of key elements of an insolvency process. Many creditors are beginning to take action and force the closure of their creditors to force sales of their assets to recoup arrears.
The 12 month rolling insolvency for the effective register in Scotland shows a rate of 51.7 companies per 10,000 on the effective register. This was up 0.1 on the preceding 12 months ending March 2024.
Northern Ireland
In March there were 29 company insolvencies in Northern Ireland. This was eight more than a month ago and 12% higher than the same period a year ago.
The total number of company insolvencies was comprised of nine compulsory liquidations (same as February); 12 CVLs (up from eight); two CVAs (same as February) and six administrations (up from two).
There were no receivership appointments made last month.
There was one moratorium recorded in Northern Ireland between June 26th 2020 and March 31st 2025 and no restructuring plans.
The total insolvency rate in the 12 months to March 2025 in Northern Ireland was 35.4 per 10,000 companies on the effective register. This is an increase of 0.3 from the 12 months to March 2025 and the third consecutive monthly increase.
The total number of company insolvencies for the whole of the UK in March 2025 was 2,139 – a monthly decrease of 20.
Tom Russell, Vice President of R3, the UK’s insolvency and restructuring trade body said:
“The announcement of the US tariffs and the rises in National Minimum Wage and Employers NI have caused directors most concern over the last few weeks. These have added further strain on businesses that have been dealing with increases in costs and contractions and caution around spending for more than 18 months, all of which have hit margins, confidence and in many cases, firms’ ability to stay solvent.
“For many small businesses particularly, an increase in late payments has a further knock on impact on liquidity and profitability, in already tight trading conditions for the small business community.
“While it’s too early to understand the extent of the impact the tariffs will have on businesses, we know they will affect purchase and sale prices, and will subsequently affect margins and profits, and potentially firms’ ability to service debt and source rescue funding.
“At the same time, March was the last month before the National Insurance and Minimum Wage increases came in and we know this has affected business confidence, recruitment and investment, as well as driving increases in enquiries for restructuring advice and support.
“We will see the impact of this policy on business from this month and from the next set of figures but if firms have not made the most of the time between its announcement and introduction, we could see an increase in corporate insolvency numbers over the next quarter.
“From a sectoral perspective, construction output has been affected by mixed weather since the start of the year and ongoing issues with payment and costs, while retail has seen a slowdown in spending as a result of this year’s late Easter. Hospitality spending has increased in recent months in part due to the warmer weather and as consumers seem more willing to spend money on going out than they had been previously.”
While there was the slightest reduction in the overall number of corporate insolvencies last month, the trend is upwards and there have been more insolvencies recorded in the first quarter of this year than last.
With ongoing economic turbulence expected and forecast for the foreseeable future through tariffs and weakening conditions, it’s the perfect time to find out what options there are available to protect your business from these storms.
You can get in touch with us right now to arrange a free initial consultation to discuss the available options that you can begin to implement for your business straight away.
No matter what aims and objectives you have for 2025, the sooner you get some impartial, practical advice and ideas, the sooner you can act on them to protect and strengthen your business so you can do everything you can to survive and thrive.