It’s been a challenging year for Scottish business owners and directors as we enter the last couple of weeks of 2024.
But hopefully a strong finish will see us welcome Hogmanay with a warm feeling from a strong December.
Before we get there, we can look at the latest corporate insolvency figures from the Accountant in Bankruptcy (AiB) to see what happened in corporate insolvencies across the country last month.
In Scotland last month there were 114 company insolvencies – a slight decrease on the total from last month but 5% higher than the total recorded one year ago.
Last month’s total was 54 compulsory liquidations (down from 60); 55 CLVs (up from 50) and five administrations (no change). There were no CVAs or receivership appointments recorded.
Between 26 June 2020 and 31 October 2024 there were two restructuring plans recorded in Scotland and no moratoriums.
Traditionally Scotland has seen more compulsory liquidations than any other kind of insolvency process but CVLs overtook them in April 2020 and have remained higher ever since.
This shows that more Scottish directors and their accountants are taking difficult decisions early and retaining elements of control of the process rather than relying on creditors taking action and forcing the closure of companies.
The total insolvency rate in Scotland in the 12 months up to and including November 2024 was 53.2 per 10,000 companies on the effective registers. This was down 0.9 from the preceding 12 months ending November 2023.
Chris Horner, Insolvency Director with BusinessRescueExpert, said: “The increase in corporate insolvencies just as the festive season gets going is a reminder of the potentially perilous financial position many Scottish businesses find themselves in.
“Insolvency levels, particularly liquidations, have remained high throughout the course of the year and, despite improving economic conditions – including lower levels of inflation and interest rate cuts – we anticipate them remaining so in 2025 as firms continue to carry unsustainable levels of debt.
“Increased National Insurance Contributions (NICs) for employers will add to firm’s costs next year, and businesses in consumer-led sectors like retail, leisure and hospitality are likely to be at risk should Christmas trading prove underwhelming.
“The volume of administration appointments will be an important barometer of business health in Scotland over the next 12 months.”
While there are still a few working days left in this calendar year, it’s never too early to start looking ahead and thinking about what you can do to begin 2025 in the best shape possible.
Once positive piece of advice we can offer right now is to get in touch with us to arrange a free initial consultation with one of our expert advisors.
Once they get a clear picture of your unique circumstances then they’ll be able to give you a tailored series of options
No matter what your ambitions and goals are, they will be specific and appropriate for you and your business.
The sooner you get in touch, the sooner you can start to implement changes that will benefit your company – not just now but well into next year and beyond.