The Insolvency Service publish the thirteenth release, of its monthly series to provide more up to date information on the number of companies and individuals who are unable to pay debts and enter formal insolvency procedures due to the COVID-19 pandemic.
Overall, the numbers of company and individual insolvencies remained low since the start of the first UK lockdown in March 2020, compared to that in the same time period in 2019 (pre-pandemic). This is likely to be driven by the Government measures put in place in response to the coronavirus pandemic, including temporary restrictions placed on the use of statutory demands and certain winding up petitions and enhanced government financial support for companies and individuals.
Company Insolvencies (UK):
In April 2021 there was a total of 925 registered company insolvencies across England and Wales, further broken down as follows:
- 819 creditors voluntary liquidations (CVLs) – 12% lower to that in April 2020 and 20% lower to April 2019
- 75 administrations – 48% lower to that in April 2020 and April 2019
- 26 compulsory liquidations – 74% lower to that in April 2020 and 89% lower to April 2019
- 5 company voluntary arrangements (CVAs) –76% lower to that in April 2020 and 81% lower to April 2019
- 0 receiverships
These figures are 23% lower than that in the same month the previous year, 35% lower than that in the same month two years before.
Note: between 26 June and 30 April 2021, four companies were granted a moratorium and six had restructuring plans sanctioned by the court. These new procedures were created by the Corporate Insolvency and Governance Act 2020. Low usage of these legislative tools is thought to be due to the Government support which remains in place for companies until 30 June 2021.
Company Insolvencies (Scotland)
April 2021 saw 38 company insolvencies in Scotland, comprising of 9 compulsory liquidations, 28 CVLS and 1 administration. there were no CVAs or receiverships. Overall, this is a reduction of 17% company insolvencies, compared to that in April 2020 and 63% compared to April 2019.
Historically, the number of company insolvencies registered in Scotland has been driven by compulsory liquidations but since April 2020, there have been more CVLs registered compared to compulsory liquidations, for eleven out of thirteen subsequent months.
Company Insolvencies (Northern Ireland)
In April 2021, there were 4 company insolvencies in Northern Ireland; comprising of 2 CVLs, 2 compulsory liquidations and no administrations, CVAs or receiverships. The total figure here was down by 74% from April 2019 but up by 67% from April 2020.
Touching on individual insolvencies….
For UK figures, they were relatively low in April 2021 with 1,425 Debt Relief Orders (DROs) and 812 bankruptcies (made up of 739 debtor applications and 73 creditor petitions). Compared to April 2019, total bankruptcies were 46% lower, debtor applications 38% lower and creditor petitions lower by 76%. When looking at April 2020 the figures were also low, being that this was the during the first UK lockdown.
The decrease in bankruptcies is thought to be driven by a fall in debtor applications and creditor petitions. The enhanced Government financial support for individuals and businesses since COVID-19 emerged has contributed to these falls.
It was also found that there were 6,822 individual voluntary arrangements (IVAs) registered, on average, during the three months ending April 2021. This was 11% higher than the three-month average observed in the period ending April 2020 – but please note this series is volatile due to technical issues experienced by one IVA provider, meaning IVAs were not registered with the Insolvency Service on a timely basis.
When looking at the figures for Northern Ireland, April 2021 saw 226 individual insolvencies, 31% lower from April 2019 (there was no individual insolvencies for Northern Ireland in April 2020 hence it is not possible to compare). This consisted of 208 IVAs, 9 DROs and 9 bankruptcies.
Find the full publication of statistics here.