The Insolvency Service publish the tenth release, and the first for 2021, 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. 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 January there was a total of 752 registered company insolvencies across England and Wales, further broken down as follows:
- 613 creditors voluntary liquidations (CVLs) – 39% lower to that in January 2020
- 74 administrations – 57% lower to that in January 2020
- 45 compulsory liquidations – 85% lower to that in January 2020
- 21 company voluntary arrangements (CVAs) – 34% lower to that in January 2020
- 0 receiverships
These figures are 50% lower than that in the same month the previous year. From analysing 2020 statistics, since the start of the UK lockdown, only December saw an increase overall in registered company insolvencies compared to that the same month the previous year.
Note: between 26 June and 31 January 2021, four companies were granted a moratorium and five 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 31 March 2021.
Company Insolvencies (Scotland)
January 2021 saw 23 company insolvencies in Scotland, comprising of 12 compulsory liquidations, 11 CVLS, no administrations, CVAs or receiverships. Overall, this is a reduction of 68% company insolvencies, compared to that in January 2020.
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 eight out of ten subsequent months.
Company Insolvencies (Northern Ireland)
In January 2021, there were 3 company insolvencies in Northern Ireland; made up of 2 CVLs and 1 compulsory liquidation. No administrations, CVAs or receiverships were noted. The total figure here was down by 88% from January 2020.
Touching on individual insolvencies….
For UK figures, they were relatively low in January, seeing a 47% decrease compared to January 2020. 2021 January saw 1,167 Debt Relief Orders (DROs) and 818 bankruptcies. Comparing to December 2020 statistics, there was 11 more bankruptcies and 74 fewer DROs.
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, coupled with reduced HMRC enforcement activity and reduced running of the courts has contributed to these falls.
It was also found that there were 6,950 individual voluntary arrangements (IVAs) registered, on average, during the three months ending January 2021. This was 17% higher than the three-month average observed in the period ending January 2020.
When looking at the figures for Northern Ireland, January 2021 saw 96 individual insolvencies, down 62% from January 2021. This consisted of 74 IVAs, 11 DROs and 11 bankruptcies.
Find the full publication of statistics here.