Company insolvencies hit a 60 year high

Voluntary insolvencies have risen to their highest level for 60 years in the first quarter of 2022.

Company insolvencies are rising as businesses battle with financial issues from rising costs, supply chain disruption, and the ending of COVID19 support measures.

Tax advisors have said that higher interest rates have made it harder for businesses to service their debts, which is likely pushing many that had borrowed under government schemes (such as the CBILS and Bounce Back Loans) into insolvency.

Almost all sectors have reported an increase in closures. The biggest increases can be seen in the hospitality, education, wholesale, motor trades, transport and health sectors.

The ending of restrictions on winding up petitions could also cause more businesses to close over the next few months. This is because creditors can once again apply to make a business insolvent due to unpaid debts.

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Article by Financial Times