Bucks trade group warns of rocketing insolvencies

“We urge any director in Buckinghamshire who is worried about their business to seek advice as soon as possible from a qualified and regulated advisor"

The insolvency trade body for Bucks is warning business owners that corporate insolvencies have nearly doubled in the past year.

There was an 87.9% increase in the number of firms entering a formal insolvency process in November 2021 compared with November 2020 in England and Wales, according to the latest official figures.

R3 – the association for insolvency and restructuring professionals – is urging directors to seek advice as soon as possible if worried about their business.

Garry Lee, R3, chair for Southern and Thames Valley

Figures from The Insolvency Service for England and Wales showed:

-Corporate insolvencies rose by 18.7% in November 2021 to a total of 1,674 compared to October 2021’s total of 1,410, and increased by 87.9% compared to November 2020's figure of 891.

-Personal insolvencies fell by 3.2% to 9,372 in November 2021 compared to 9,678 in October 2021, and were 0.4% higher than November 2020's figure of 9,339.

Garry Lee, chair of insolvency and restructuring trade body R3’s Southern and Thames Valley region, said: “The latest figures bring the impact of the pandemic into sharp focus with a near doubling of corporate insolvencies for November 2021 compared with November 2020.

“More recently, the monthly increase in corporate insolvencies from October 2021 to November 2021 has been driven by a rise in Creditor Voluntary Liquidations (CVLs) to the highest number in more than two and a half years.

“The increase in the use of this process suggests that a rising number of company directors are choosing to close their businesses, perhaps because they feel that survival is impossible in the current climate.”

Garry, who is an associate director at accountancy firm Smith & Williamson, added: “We urge any director in Buckinghamshire who is worried about their business to seek advice as soon as possible from a qualified and regulated advisor.

“Seeking help at an early stage provides more options, more time and potentially better outcomes for businesses than if delayed.”

A spokesperson for R3 said: "The monthly fall in personal insolvency figures was driven by a reduction in Individual Voluntary Arrangements.

"Debt Relief Order numbers increased slightly month-on-month, which can be attributed to the widening of the eligibility criteria for this procedure introduced at the end of June."

R3 also warned that Plan B restrictions could have an impact on businesses throughout the holiday season.

Garry said: “Times are tough for businesses in Buckinghamshire as the pandemic continues to take its toll on the economy and the firms that drive it.

“Over the last few weeks, businesses have been hit by the triple whammy of increased costs, supply chain issues and rising COVID cases.

“They have also been operating in the face of low consumer confidence and anaemic economic growth in recent months, which, coupled with an increasingly difficult COVID situation, has led to changes in people’s shopping and spending habits and taken its toll on revenue levels.

“It remains to be seen how the introduction of Plan B will affect the economy in the short and medium term, but we know it will affect footfall, spending and operations."