Andy McGill, Restructuring and Insolvency Partner at UK top ten accountancy and advisory firm Azets, comments on the company insolvency statistics for Q4 2023.
In 2023, there were 25,158 registered company insolvencies, the highest annual number since 1993. This includes 20,577 creditors’ voluntary liquidations (CVLs), 2,827 compulsory liquidations, 1,567 administrations, 185 company voluntary arrangements (CVAs) and two receivership appointments.
CVLs increased by 9% from 2022 to a new record high number. Andy (pic) said: “This time last year, we warned that business owners ought to be a bit more nervous. Forced injections of liquidity into the economy often create complacency, and despite some recent easing of financial pressures, many businesses are still battling the long-term effects of economic and geopolitical events that began during the pandemic.
“Even before then, in the decade following the financial crash, 300-year low-interest rates created thousands of ‘zombie’ businesses that were able to live off cheap borrowing without any significant growth. The high level of insolvencies throughout 2023 is driven by a vast number of businesses unable to service a more meaningful interest bill.
“Unfortunately, the outlook for 2024 is not much better and we can expect business failures to rise at much the same rate. However, companies that recognise financial issues & obtain robust professional advice & help sooner have a much greater chance of identifying options available & implementing strategies to preserve their business and protect jobs.
“Time has well and truly run out for those that continue to bury their heads.”
