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Monthly Insolvency Statistics July 2024

Published on : 20th August, 2024 | Updated on : 20th August, 2024

Written ByRobert Moore

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Rob has over a decade of experience in web and general marketing. He has extensive knowledge of the Insolvency sector and has helped many worried directors with their questions.

Rob is now working with the Board at KSA Group Ltd to develop strategic marketing programmes to support the business plan and drive more company rescues.

Robert Moore
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The July monthly insolvency statistics have been released. Here we provide a summary overview.

Company Insolvencies

The July 2024 company insolvency statistics for England and Wales showed a total of 2,191 insolvencies, a 16% increase compared to July 2023.

Creditors’ voluntary liquidations (CVLs) remained the most common, comprising 77% of cases.

Compulsory liquidations also saw a rise, reaching their highest level since 2018. Sectors such as construction and retail were notably impacted.

Scotland saw a 21% year-on-year increase in insolvencies, while Northern Ireland’s figures remained stable. The overall trend indicates a gradual increase in insolvency cases across the UK.

Just 25 companies were rescued by using Company Voluntary Arrangements (CVAs) in July.  This is unfortunate as surely it is possible that some of the 1000s of companies that went insolvent last month some might have been able to survive by using a CVA?

CVLs

The number of CVLs decreased by 9% from June 2024 but was 15% higher than during the same month last year (July 2023), after seasonal adjustment.

Compulsory Liquidations

The number of seasonally adjusted compulsory liquidations in July 2024 was the highest monthly number since August 2018, 5% higher than in June 2024 and 27% higher than in July 2023.

In 2023, there were 44% more compulsory liquidations than in 2022, but they were still 4% fewer than in 2019 (before to the pandemic). The numbers have risen from the all-time lows observed in 2020 and 2021, when limitations were placed on the use of winding-up petitions and statutory demands, which resulted in compulsory liquidations.

Administrations

The number of administrations in July 2024 was 10% lower than in June 2024 but 6% higher than in July 2023, after seasonal adjustment.

High profile administrations have been few and far between these last few months with Carpetright being the most noteable exception.

It does seem that In the 12 months to June 2024 compared to the previous 12-month period, insolvencies increased by the most in the hospitality sector.  The increase was c.15%

This is not surprising given that this includes the period of high inflation in the last half of last year.

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Monthly Insolvency Statistics: December 2024

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In 2024, there were 23,872 registered company insolvencies, which included 18,840 creditors' voluntary liquidations (CVLs), 3,230 compulsory liquidations, 1,597 administrations, 202 company voluntary arrangements (CVAs), and three receivership appointments. The overall number of corporate insolvencies in 2024 was 5% lower than in 2023, the greatest yearly figure since 1993.The reduction in overall firm insolvency numbers in 2024 was mostly driven by CVLs, which were 8% lower than the record high levels recorded in 2023. The number of obligatory liquidations grew by 14% from 2023, reaching its highest level since 2014. Administrations (increased 2%) and CVAs (up 9%) both exceeded 2023 levels.In 2024, one in every 191 firms on the firms House effective register (at a rate of 52.4 per 10,000 companies) becam insolvent, down from 57.2 per 10,000 in 2023. The 2024 insolvency rate is significantly lower than the peak of 113.1 per 10,000 enterprises experienced during the 2008-09 recession, despite the fact that 2023 and 2024 had comparable levels of insolvencies. This is because the number of businesses on the effective register has more than doubled.​Monthly Summary for December 2024 Following seasonal adjustments, the number of registered company insolvencies in England and Wales was 1,838 in December 2024, 6% lower than in November 2024 (1,962) and 14% lower than the same month the previous year (2,139 in December 2023). The number of corporate insolvencies remained significantly greater than those observed during the COVID-19 epidemic and between 2014 and 2019.Company insolvencies in December 2024 included 273 compulsory liquidations, 1,421 CVLs, 127 administrations, and 17 CVAs. There were no receivership appointments. Compulsory liquidations and CVAs were up from November 2024, while CVLs and administrations were down.There has been much comment lately about the number of increased compulsory liquidations being due to the increased taxes imposed by the government.  However, in our view, given that the overall insolvency rates have decreased, the most likely reason for these compulsory liquidations increase is a "mopping up" of the delinquent companies that have already stopped trading, owe tax, and failed to pay back bounce back and other loans following the pandemic.

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Monthly Insolvency Statistics: December 2024
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Monthly Insolvency Statistics: November 2024

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​After seasonal adjustment, the number of registered company insolvencies in England and Wales was 1,966 in November 2024, 13% higher than in October 2024 (1,743) and 12% lower than the same month in the previous year (2,243 in November 2023). The number of company insolvencies remained much higher than those seen both during the COVID-19 pandemic and between 2014 and 2019. ​Company Insolvencies Company insolvencies in November 2024 consisted of 254 compulsory liquidations, 1,565 creditors’ voluntary liquidations (CVLs), 132 administrations, 14 company voluntary arrangements (CVAs) and one receivership appointment. All types of company insolvency except for receivership appointments (which are rare) were higher than in October 2024.One in 189 companies on the Companies House effective register (at a rate of 52.9 per 10,000 companies) entered insolvency between 1 December 2023 and 30 November 2024. This was a decrease from the 57.3 per 10,000 companies that entered insolvency in the 12 months ending 30 November 2023. Insolvency rates are calculated on a 12-month rolling basis as a proportion of the total number of companies on the effective register. The 12-month rolling rates show longer term trends and reduce the volatility associated with estimates based on single months.While the insolvency rate has increased since the lows seen in 2020 and 2021, it remains much lower than the peak of 113.1 per 10,000 companies seen during the 2008-09 recession. This is because the number of companies on the effective register has more than doubled over this period.  CVLs In November 2024, CVLs accounted for 80% of all company insolvencies. The number of CVLs increased by 8% from October 2024 and was 15% lower compared to the same month last year (November 2023) after seasonal adjustment.In 2023, the annual number of CVLs reached its highest level since the start of the time series in 1960, continuing the year-on-year increases seen since 2021. Between 2017 and 2019, CVLs had been rising at approximately 10% per year, but during the COVID-19 pandemic, they fell to their lowest levels since 2007. Compulsory liquidations The seasonally adjusted number of compulsory liquidations in November 2024 was 37% higher than in October 2024 and 6% lower than in November 2023.The number of compulsory liquidations has increased from record low levels seen in 2020 and 2021, while restrictions applied to the use of statutory demands and certain winding-up petitions (leading to compulsory liquidations). In 2023, compulsory liquidations increased by 44% from 2022 but remained 4% lower than 2019 (pre-pandemic levels). Administrations The number of administrations in November 2024 was 36% higher than in October 2024 and 12% higher than in November 2023 after seasonal adjustment.Numbers of administrations increased during 2022 and 2023 from an 18-year annual low seen during the COVID-19 pandemic in 2021. Current levels are similar to those seen between 2015 and 2019. ​Find the full release here.

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Monthly Insolvency Statistics: November 2024
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Government Research Into Creditors Voluntary Liquidations Highlights Virtually Nil Return to Creditors

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The Insolvency Service has just released its Creditors’ Voluntary Liquidation (CVL) Research Report.  The purpose of this report was to ascertain whether the recent reforms in 2017 on the CVL process had, in fact, made the process more efficient and increased the returns to creditors.Analysis was performed on a randomly sampled dataset of 2,717 completed CVLs which started in 2017.Efficiency was assessed through three quantitative measures: time to complete the CVL, associated costs, and recovery rates for creditors.Time: 6% of the sampled cases were ongoing at the time of data collection. The median duration to complete a CVL was 712 days.Cost: The median cost, represented as fees relative to the estate's value, was 163%.Recovery Rate: The median recovery rate for all creditors was 0%, indicating that in many cases, creditors did not receive any return.One might ask why the median was used, as opposed to the mean, in these calculations.  This is mainly because in the random sample there may well be some very large company liquidations that would distort the statistics.Other interesting statistics that come out of the research are as followsMedian Pre appointment fees were £4000 see the chart below that shows total fees. The overall returns to creditors are very poor.  The charts below shows preferential creditors that in most cases will be employees and HMRC (post 2020) and Fixed charge creditors who are in fact the first in line showing virtually nil return​ ​This poor level of return is concerning as one of the liquidator's jobs is to try and liquidate the assets to repay creditors.  However, remember the company in question has gone into liquidation as it is unable to pay its creditors!  Most directors will try and put off the inevitable and borrow against any assets they may have or sell them before they enter liquidation.  The reality is that most companies do not have any liquid assets that can be easily sold to repay creditors.  Often assets of any value are costly to move or have a limited market value.  In addition, the liquidators have to do an investigation into the directors conduct to see if they should be disqualified. In addition, in the name of transparency, they have a duty to keep the creditors informed of the reasons for failure, and why they are not going to get any return.So, if CVLs offer such low returns to creditors there should be an alternative process that insolvency practitioners should be using and directors should be made aware of!Administrations are costly and mainly for larger businesses.  The alternative is of course the use of more informal deals with creditors such as Time to Pay Arrangements (TTPs) and the use of the Company Voluntary Arrangement (CVAs) insolvency rescue mechanism.  These are harder to implement than simply advising the company to liquidate and of course there must be an underlying profitable business there.  But surely there are companies out there that could pay off some of the debts over a time period of say, 3-5 years.  Even if the CVA or TTP lasts only a year or two it is signicantly better than a CVL that on this research gives Nil return to any creditor!  Remember a CVA doesn't even bind the fixed charge (secured creditor).The number of TTPs are not really recorded as there is no formal insolvency but the number of CVAs are and it is very low at some 15 or 20 a month.As a small firm that does the second highest number of CVAs, after Begbies Traynor who are the largest insolvency firm in the UK, we believe they are ridiculously underused.However using CVAs KSA Group has;Distributed £31m to creditors 2009-2022. This excludes secured debts and secured factoring facilities, much of which have been or will be repaid. Repaid £17.9m to HMRC between 2009 and 2023, remember this for the most part when HMRC was an unsecured creditor (2009-2020). That’s taxpayers money. Saved creditors money. Preserved 320 customers for thousands for suppliers, accountants and professional advisors.Ultimately, the main thing that should come out of this research is that Directors should act early and not bury their heads in the sand.  Also insolvency pratitioners should not be afraid of exploring other options for distressed businesses such as TTPs or CVAs.

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Government Research Into Creditors Voluntary Liquidations Highlights Virtually Nil Return to Creditors