The Insolvency Service publish the third 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 June 2020, compared to that in June 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 June, the breakdown of the 732 total company insolvencies in England and Wales is as follows:
- 557 creditors voluntary liquidations (CVLs)
- 100 administrations
- 61 compulsory liquidations
- 14 company voluntary arrangements (CVAs)
- 0 receiverships
This was a 60% decrease in the numbers of CVAs and a 33% decrease of administrations, compared to the statistics of June 2019. Compared to May 2020, the amount of compulsory liquidations almost doubled.
However, overall, the number of company insolvencies fell by 50% compared to the same month the year before; driven mainly by a fall in the amount of CVLs and compulsory liquidations.
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 – now further extended until 30 September. Compulsory liquidations require a winding up order by the court; the fact that running costs of the courts has been reduced and could therefore have a part to play.
Company Insolvencies (Scotland)
June 2020 saw 46 company insolvencies in Scotland, comprising of 21 compulsory liquidations, 19 CVLS, 6 administrations and no CVAs or receiverships. Overall, this is a reduction of 32% company insolvencies, compared to that in June 2019.
Company Insolvencies (Northern Ireland)
In June 2020, there were 9 company insolvencies in Northern Ireland; made up of 7 CVLs, 1 CVAs and 1 administration. There were no compulsory liquidations or administrative receiverships.
Touching on individual insolvencies….
For UK figures, these remained low in June, seeing a 15% fall in DROs and 65% fall in bankruptcies compared to the same month last year. The figures show 1,775 Debt Relief Orders (DROs) and 454 bankruptcies.
It was also found that there were 8,428 individual voluntary arrangements (IVAs) registered, on average, each month during the three months ending June 2020: a 33% increase when compared with the average number of registrations in each of the three months ending June 2019. However, these figures can be put partly down to the late registration of IVAs in May.
When looking at the figures for Northern Ireland, June 2020 saw 272 individual insolvencies, up 42% from June 2019. This consisted of 24 debt relief orders, 242 IVAs and 6 bankruptcies.
Find the full publication of statistics here.