The Insolvency Service publish the fifth release in 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 in August 2020, compared to that in August 2019. This is likely to be driven by the Government measures put in place in response to the coronavirus pandemic, including HMRC reducing its enforcement activity, reduced operational running of the courts, 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 August there was a total of 778 company insolvencies across England and Wales, further broken down as follows:
- 586 creditors voluntary liquidations (CVLs)
- 110 administrations
- 66 compulsory liquidations
- 15 company voluntary arrangements (CVAs)
- 1 receivership
This was a 43% decrease overall in company insolvencies, compared to the same month last year. This is thought to be driven by the decrease in CVLs and compulsory liquidations, which fell by 39% and 67% respectively. CVAs were also lower, by 50%, when compared.
In July 2020, administrations and compulsory liquidations reached a ‘post-lockdown’ peak but August figures are more aligned to the months prior lockdown.
It is thought that the reduction in the number of company insolvencies was driven by the range of Government support put in place to financially support companies in response to the pandemic. The government also announced they would prohibit the use of statutory demands and certain winding-up petitions from 27 April to 30 June 2020 – further extended until 30 September by the Corporate Insolvency and Governance Act.
Company Insolvencies (Scotland)
August 2020 saw 44 company insolvencies in Scotland, comprising of 19 compulsory liquidations, 21 CVLS, 3 administrations, 1 CVA and no receiverships. Overall, this is a reduction of 43% company insolvencies, compared to that in August 2019.
Company Insolvencies (Northern Ireland)
In August 2020, there were just 4 company insolvencies in Northern Ireland; made up of 2 CVLs and 2 administration. The total figure here was down from 22 in August 2019.
Touching on individual insolvencies….
For UK figures, they remained low in August. There were 1,332 Debt Relief Orders (DROs) and 769 bankruptcies. This was a reduction by 31% and 43% respectively, compared to the same month last year.
It was also found that there were 4,885 individual voluntary arrangements (IVAs) registered, on average, during the three months ending August 2020. This was 28% lower than the three-month average observed in the period ending August 2019.
When looking at the figures for Northern Ireland, August 2020 saw 107 individual insolvencies, down 48% from August 2019. This consisted of 21 debt relief orders, 82 IVAs and 4 bankruptcies.
Find the full publication of statistics here.