The Business Magazine - B2B Business News - Site Logo
The Business Magazine March 2024
Read now
PICK YOUR EDITION

Duncan Swift, partner at Azets, on March insolvency statistics

16 April 2021
Share
The Business Magazine article image for: Duncan Swift, partner at Azets, on March insolvency statistics

Duncan Swift and Louise Brittain, restructuring and insolvency partners at Azets, the UK’s largest regional accountancy and business advisers to SMEs, comment on the March 2021 corporate and personal insolvency statistics for England and Wales.

Duncan Swift - restructuring and insolvency partner at Azets, UK’s largest accountancy firm for SMEs

Top 10 UK accounting, tax and business advisory firm Azets earlier this week announced its acquisition of Moore (South)’s R&I team, headed up by Swift and Chris Tate. The team consists of licenced insolvency practitioners and restructuring specialists covering Southern England from Azets’ Solent-based offices.

Corporate insolvencies

Swift comments on the statistics, out today: “We now have a full-year picture of the effects of the pandemic; and accompanying government support measures, on corporate insolvency volumes.

“Throughout the year, the number of corporate insolvencies has typically been 30%-40% below the prior year (2019). This trend continues to be reflected in the number (992) for last month (March 2021) that is 20% below March 2020; the start of the first lockdown, which was itself 22% down in volume on the prior year (March 2019).

“Clearly government support measures such as loans and suspension of creditor rights to enforce payment by debtor companies have helped many companies ride out the economic storm caused by the pandemic, including thousands of companies that were already financially weak before the pandemic started.

“This cannot go on forever. In past economic recessionary shocks, the greatest number of corporate failures happen immediately after; rather than before or during, as companies grapple with the twin challenges of rebuilding their business, while having to start to repay historic debt, which results in ‘over-trading’ relative to their available financial capital.

“This is the lull before the storm which is reflected in the low numbers of moratoriums (4) and restructuring plans (5) since these new tools, introduced by the Corporate Insolvency & Governance Act 2020, came into force (26 June 2020). Business owners need to act now to avoid tipping over the edge this year.”

Personal insolvencies

Brittain, restructuring and insolvency partner and personal insolvency specialist at Azets says: “Formal insolvency processes that people are able to personally apply for have seen a considerable rise with IVAs up by 83% in February and more debtors filing for their own bankruptcies and Debt Relief Orders which also rose by 15%.

“This means that people are seriously feeling the pressure of the debt burden and are finding they now have no alternative but to enter formal insolvency proceedings to deal with the mounting debt problem. After a year of lockdown and furlough, many are now finding they’re unable to hold on any longer and are having to seek the relief of the insolvency regime to relieve the pressure they are under.

“Mental health issues and other stresses continue to mount as a result of the pandemic and lockdowns, so it's not surprising that people are deciding they have no alternative. History has shown that when people feel under pressure financially, this does affect the recovery of businesses. The high street may find that despite shops opening up again, they may not get the return to the same level of customer spending they had before.”


Related articles

Upcoming events

view more
21
Mar

Solent Deals Awards 2024

Hilton Southampton
Utilita Bowl
More info
06
Jun

South Coast Property Awards 2024

Hilton Southampton
Utilita Bowl
More info
18
Jul

Thames Valley Tech & Innovation Awards 2024

Reading FC Conference & Events
Select Car Leasing Stadium, Reading
More info
12
Sep

Thames Valley Property Awards 2024

Ascot Pavilion
Ascot Racecourse
More info
03
Oct

South Coast Tech & Innovation Awards 2024

Hilton Southampton
Utilita Bowl
More info

Related articles