Company insolvencies in UK fall 15% in April
In April 2023, the registered company insolvencies in the UK totalled 1,685, showing a 15% decrease compared to the same month in the previous year (1,988 in April 2022). However, despite this decline, the current numbers were still higher than the levels observed during the period when the government implemented support measures in response to the COVID-19 pandemic. Additionally, the April 2023 figures were also higher than the pre-pandemic levels.
Among the insolvencies, there were 183 compulsory liquidations in April 2023, nearly double the number recorded in April 2022. The increase in compulsory liquidations can be attributed in part to a rise in winding-up petitions filed by HMRC. These numbers have risen from the historically low levels seen during the pandemic.
In April 2023, there were 1,368 Creditors’ Voluntary Liquidations (CVLs), which were 23% lower than in April 2022. On the other hand, the numbers of administrations and Company Voluntary Arrangements (CVAs) were higher than in April 2022.
The decrease in overall company insolvencies in the UK compared to the same month the previous year was primarily driven by a decline in the number of CVLs, which are the most common type of company insolvency. However, the other types of company insolvency increased compared to the same period last year. The increase in compulsory liquidations is partly due to a rise in winding-up petitions presented by HMRC.
Individual insolvencies
Regarding individual insolvencies in the UK, there were 531 bankruptcies registered in April 2023, representing a 5% decrease compared to April 2022 and less than half of the levels seen before 2020.
In April 2023, there were 2,384 Debt Relief Orders (DROs), which was 24% higher than in April 2022. However, the monthly DRO numbers may be subject to volatility due to the introduction of new DRO hubs.
In the three-month period ending in April 2023, an average of 6,336 Individual Voluntary Arrangements (IVAs) were registered per month, showing a 16% decrease compared to the three-month period ending in April 2022.
As for Breathing Space registrations, there were 6,613 recorded in April 2023, which is 23% higher than the number registered in April 2022. Out of these, 6,485 were Standard breathing space registrations, representing a 23% increase from April 2022, while 128 were Mental Health breathing space registrations, showing a 21% increase from April 2022.
Since the onset of the COVID-19 pandemic until mid-2021, both company and individual insolvencies remained low compared to pre-pandemic levels. This can be attributed in part to the government support measures implemented during that time. However, while company insolvency numbers have now returned to and surpassed pre-pandemic levels, the numbers of bankruptcies for individuals still remain lower.
Also See: US-based Vice Media files for bankruptcy
