Everything you need to know

One of the first things we’re going to do when lockdowns and restrictions are firmly a memory and in the rear view mirror is to go out to the theatre. 

It will be great to experience an occasion safely with other people again as, despite Zoom productions and recordings, there’s nothing quite like being in a great live venue. 

Especially for productions like Wicked where the cast take to the air and fly out above the audiences heads singing about how they’re defying gravity. 

Which brings us nicely to the latest UK Insolvency statistics for February that have just been released by The Insolvency Service.

We’re still in the first quarter of 2021 and the trend begun last month of total company insolvencies falling away after a rise in December continues.

The total number of company insolvencies in February 2021 for England and Wales fell again by 9% to 686.  

This was down from January’s total of 754 and is 49% lower than February 2020’s figure of 1,348. It’s also the lowest number of company insolvencies recorded since January 2019.  

Given that thousands of businesses are unable to open or trade at the moment, haven’t for months and that millions of workers are furloughed – defying gravity is an apt summary of the numbers we’re seeing. 

The total number of 686 registered company insolvencies for England and Wales is made up of:- 

There were no receivership appointments recorded last month. 

In the previous year of lockdowns, the total number of insolvencies has been lower than the previous month 10 out of 11 times.  

Additionally there were 26 company insolvencies in Scotland (7 compulsory liquidations, 16 CVLs, 2 administrations and 1 CVA), down 70% year on year with 5 in Northern Ireland (all CVLs), down a huge 81% annually, making an overall UK total of 717.

The Insolvency Service sticks to their perfectly logical explanation that the results are depressed against normal expectations due to a mixture of the pandemic and response itself and the various ongoing and extended government support schemes. 

The more well-known being the Coronavirus Job Retention Scheme, Self-Employed Income Support Scheme and Bounce Back Loans.  

Equally impactful is the ongoing suspension of creditor actions such as statutory demands and winding-up petitions which are currently due to begin again after March 31st 2021 but, like other support measures, could be extended again.

The Insolvency Service also notes that more companies are taking advantage of other new procedures created last year including having restructuring plans sanctioned by courts and insolvency moratoriums.

“Insolvencies stemmed rather than stopped”

Colin Haig, President of R3, the insolvency and restructuring trade body said: “The fall in corporate insolvency numbers has been driven by a reduction in all corporate insolvency processes.

“Despite the fall in insolvencies, February continued to be tough for businesses and the economy. The national lockdown meant people weren’t able to celebrate Christmas and New Year as they have traditionally, which will have hit a crucial trading period for many businesses, and had an impact on their success – and in some cases through the first quarter of the year.

“Government support has been and continues to be a lifeline for many – and has stemmed rather than stopped the flow of insolvencies we would expect to see in this kind of economic climate.

“In addition, the usual ‘trigger points’ for action, such as winding-up petitions or repossession notices, are out of the picture at the moment, with many company directors putting off examining their options as a result.” 

Don’t be complacent

While it’s complicated trying to find an accurate attribution for the quote “complacency is the enemy of progress” – there’s no denying its wisdom. 

The current benign conditions for struggling companies to avoid creditors cannot and will not last forever. Statutory demands and winding up petitions could be being issued once again by the end of the month so time is short to start making plans if your business is facing financial challenges. 

We’re offering a free, initial consultation for any company that wants to talk to us to begin planning their life after lockdown. 

We’ll get a full picture of your unique circumstances and be able to quickly advise you on what options you’ve got to protect and strengthen your business right now and when restrictions begin to ease.

Get in touch today and take the first steps into making a more stable future for your business.

It would be wicked not to.