Scottish businesses in liquidation up by 36%

23 July 2014

The latest Accountant in Bankruptcy (AiB) report has revealed the number of Scottish businesses in insolvency has risen by 35.9%, compared to the same time last year (Q1 2013). That’s an increase from 184 firms to 250 businesses that have entered liquidation. Furthermore, the figures show there was even a rise of 2.5% from Q4 2013 to Q1 2014. 

The figures include businesses that have entered compulsory liquidation, creditors’ voluntary liquidation (CVL) and Receiverships.

Interestingly, it is the number of compulsory liquidations that has increased, implying the HMRC department in Scotland are becoming tougher on insolvent companies. Around 60% of compulsory liquidations are lead by HMRC. 

The number of CVLs has in fact fallen by 22% year-on-year which suggests companies are going down alternative routes, like administration, or they've run out of money and have let the businesses be compulsory wound up.

It could well be that businesses are not well informed of the possible rescue options and instead are recommended liquidations and winding up of the company. If this is advice they are unsure of or don't like, they could leave it too late, resulting in a compulsory liquidation.  

Financial Year

2013-14

2014-15

Percentage change 2014-15 Q1 on:

Quarter

Q1

Q2

Q3

Q4

Q1

2013-14 Q4

2014-15 Q1

Receiverships

1

6

2

1

0

-100.0%

-100.0%

Compulsory Liquidations

103

155

163

181

188

3.9%

82.5%

Creditors' Voluntary Liquidations

80

107

64

62

62

0.0%

-22.5%

Total Corporate Insolvencies

184

268

229

244

250

2.5%

35.9%

Members' Voluntary Liquidations

75

75

119

89

118

32.6%

57.3%

Source: Accountant in Bankruptcy (AiB) - Scotland's Insolvency Service