Wave of restructuring and insolvencies is inevitable warns RSM Restructuring Advisory

The total number of company insolvencies in England and Wales in November 2022 was 2,029 – a 21% year-on-year increase (1,676 in November 2021) and 35% higher than pre-pandemic levels (1,505 in November 2019) according to figures released today.

Of this total, 290 were compulsory liquidations which were 5 times higher than November 2021. The number of compulsory liquidations have increased from historical lows during the pandemic partly due to an increase in the number of winding-up petitions from HMRC.

In November 2022 there were 1,595 Creditors’ Voluntary Liquidations (CVLs), 5% higher than in November 2021 and 50% higher than November 2019. Numbers of administrations and Company Voluntary Arrangements (CVAs) remained lower than before the pandemic.

Commenting on the latest figures, Gareth Harris, partner at RSM UK Restructuring Advisory, said: ‘Whilst these figures continue the recent trend of a high level of “shut down” insolvencies via a CVL process, what is equally clear is that other stakeholders are also losing patience or ability to wait for overdue payments.

‘The increase in HMRC compulsory winding ups is a timely reminder that they won’t wait forever. It now feels inevitable that the current economic position will drive this wave of insolvencies further - long into 2023 - and those who can see issues coming need to act now to avoid any terminal process.’