The insolvency statistics for Q2 2020 (England, Scotland and Northern Ireland) have been released. You can access the full publication on the Government website but can see an overview of the findings here.
England and Wales
The latest insolvency statistics, for Q2 2020, April to June, show that in total there was a drop in the amount of company insolvencies by nearly a quarter (23%), compared to Q1 2020 and by one-third (33%) compared to the same quarter in 2019. The figure recorded for Q2 2020 was 2,974 company insolvencies.
It is thought that this reduction is somewhat driven by the Government measures put in place in response to the unprecedented coronavirus. The measures include the following:
- Reduced operational running of the courts
- Reduced HMRC enforcement activity since 23 March, when lockdown was applied in the UK
- Temporary restrictions on the use of statutory demands and some winding up petitions
- Enhanced financial support for companies and individuals
Creditors’ voluntary liquidations (CVLs) were the most common insolvency process used, accounting for 79% of cases. Compulsory liquidations saw the largest percentage decrease in Q2 2020, falling 76% compared to the same quarter in the previous year. Company voluntary arrangements (CVAs) decreased by 49% compared to the same quarter in the previous year and administrations fell by 10%.
The company liquidation rate has also fallen in the 12 months ending Q2 2020. It is now 36.9 per 10,000 active companies in England and Wales, from 40.7 per 10,000 in the 12 months ending Q1 2020 and the same quarter a year ago.
In the 12 months ending Q2 2020, the rate of compulsory liquidations decreased to 6.1 per 10,000, from 7.7 per 10,000 in the 12 months ending Q1 2020 and the rate of CVLs decreased to 29.5 per 10,000 from 31.6 per 10,000. The rate of CVLS after administration remained flat at just 1.4 per 10,000.
When looking at sector-specific figures, all major industry groupings saw a decline in insolvency in the 12 months ending Q2 2020. The three industries facing the highest number of insolvencies in this period were construction, with 2,778 insolvencies, the wholesale and retail trade; repair of vehicles industrial grouping, with 2,177 insolvencies, and the accommodation and food services grouping with 2,026 insolvencies.
Company Insolvency in Scotland
Overall, there were 127 company insolvencies in Scotland for the second quarter of 2020, this being a decrease of 49% compared to the same quarter of the previous year.
This figure is made up of 48 compulsory liquidations, 59 CVLS, 16 administrations, 4 CVAs and no receiverships.
Company Insolvency in Northern Ireland
For Northern Ireland, figures show a total of 17 company insolvencies, this being a decrease of 81% compared to the same quarter of 2019.
This is made up of 19 CVLS, 5 CVAs and 2 administrations.
Due to lockdown measures, there were no compulsory liquidations in Q2 2020. The coronavirus pandemic meant closure of the Courts and Insolvency Service offices in Northern Ireland.