Insolvency numbers among businesses has jumped by almost 4% over the first three months of 2011, according to figures released by The Insolvency Service. Companies who declared insolvency has increased by 3.7% from the previous quarter, rising to 4,121 on a seasonally-adjusted basis. Year on year, for the same period, the numbers saw an increase of 2.1%
Other figures announced were 1,074 compulsory liquidations, which was a drop of 10.2% from the previous quarter, and a massive 17.2% drop from the same period of 2010. Creditor’s voluntary liquidations rose to 3,047, a 9.7% rise from the last quarter of 2010, and an 11.2% rise on the same period the year before.
Deputy Vice-president of the Insolvency Practitioners Association, Charles Turner, commented that small businesses had suffered as a result of the UK economy, contracting by 0.5% in the last three months of 2010, which led to self-employed business owners fighting insolvency. Mr Turner said; ‘Self-employed traders are particularly vulnerable to changes in the economy, with increases in petrol, tax and inflation all affecting their businesses, as well as their personal finances.’
For the second consecutive quarter, the number of company administrations also saw a rise to 782, along with 349 receiverships and 183 company voluntary arrangements. Although, the number of individuals declaring insolvency and applying for Individual Voluntary Arrangement had dropped to its lowest level – during the same period – for over two years.
30,162 people declared bankruptcy and took out and IVA or Debt Relief Order over the first three months of the last year. The Insolvency Service pointed out that the numbers were at their lowest since the last quarter of 2008, and was the fourth consecutive fall over the same quarter. However, Mr Turner continues to support the figures, saying: ‘Although the number of individual insolvencies in England and Wales has dropped again, it is worrying that the proportion of bankruptcy orders for the self-employed, as opposed to consumers, has increased considerably to 18.9% in the fourth quarter of 2010, from 13% in the fourth quarter of 2009.’
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