Corporate Insolvencies hit five year peak.

James Salmon, Operations Director.

1st May 2019.

Corporate Insolvencies hit five year peak, rising by 6.3% in the first three months of the year compared with the final quarter of 2018, and by 5.1% compared with the start of last year, according to the Government’s Insolvency Service.

Insolvencies total hits more than 4,000 in first quarter as Brexit uncertainty and a struggling high street prevails.

The wholesale and retail trade and the vehicle repair industry had the largest increase in underlying insolvencies over the quarter.

Expert View

Insolvency experts said Brexit uncertainty had put intense pressure on firms as they stockpiled more goods before the original Brexit deadline on 29 March, now postponed until October.

Stuart Frith, the president of the insolvency and restructuring trade body R3, said firms had “exhausted their standard toolkit for coping with reduced demand”.

He added: “Further discounting won’t cut it, or is impossible, and a restructuring is the only option.”

Mike Cherry, the national chairman of the Federation of Small Businesses, said that rising employment costs, business rates and significant Brexit uncertainty in particular had taken their toll on smaller firms.

“Ongoing uncertainty is a critical issue for small firms and the self-employed, and central to this is the unknown nature of what the UK’s relationship will look like with the EU,” he said.

Personal Insolvencies

Personal insolvencies fell by 8.1% compared with the eight-year high reached at the end of last year. but they were still 15.9% higher in the first three months of 2019 than at the start of 2018.

There were 31,527 individual insolvencies in the first three months of the year, the second-highest since 2010.

Industry Analysts commented that consumers were struggling with high levels of personal debt on credit cards, while real wages remained below the peak recorded before the financial crisis a decade ago.

Peter Briffett, co-founder and chief executive of the pay app Wagestream, said: “That the insolvency rate today is more than double what it was in the early noughties underlines how, as a nation, we have become increasingly leveraged on debt.”

Insolvency service

The Insolvency Service said there were 451 administrations in the first three months of the year, up 21.8% from the final three months of 2018 – and the most recorded by the government agency since the first quarter of 2014.

Total underlying insolvencies – which includes liquidations and creditors voluntary arrangements alongside administrations – rose by 6.3% on the quarter to hit 4,187 in the first three months of 2019.

Retailers who struggled over the crucial Christmas shopping period typically go into administration in the first quarter. Trading on the high street has recovered over recent months, but retailers have said the festive season was one of the worst they had seen in a decade amid subdued levels of consumer confidence.

The Insolvency Service said the wholesale and retail trade and vehicle repair industry had the largest increase in underlying insolvencies over the quarter.

End of six year insolvency decline spells concern for companies

It appears that uncertainty relating to the outcome of Britain’s impending withdrawal from the EU may be partially influencing the increase in the number of companies running into trouble. From 2009 until 2015, the number of businesses going insolvent had been on a six year decline as levels settled after the global financial crisis – with rates dropping by 39% over the period. Following the UK’s 2016 vote to leave the EU however, the annual insolvency total jumped up by nearly 2,000 from the previous year.

With economic uncertainty ongoing and a range of pressures still impacting businesses, the outlook for companies in 2019 remains bleak. Analysts estimate that 481,000 British businesses are currently in significant distress and exposed to a real risk of becoming insolvent. Companies hoping to guard against these risks will need to make sure that their credit management and accounting systems are strong enough to give them the best chance of retaining liquidity in the face of mounting pressures.

Begbies’ revenue boost

As if to underline this, Insolvencies specialist Begbies Traynor announced on 8th May 2019 that  it performed strongly in the final quarter of its financial year and expect s full-year revenues and profits to be “comfortably ahead of market expectations”.

Is your business threatened by insolvency?

Your business might need a cash injection to avoid insolvency but are you finding it hard to secure that funding?

Rather than have to deal with difficult bankers, do you realise there may be a hidden source of capital within your business waiting to be activated.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and barely used legislation your business could be due huge sums that you didn’t even know you were due.

That compensation could be the cash injection your business needed.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hardwork. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

The Credit Protection Association plc (established 1914) has spent 3 years researching the accounting, technical and legal implications of Late Payment Legislation and our staff and retained solicitors probably have as much working knowledge of this legislation as could be found anywhere.

We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.

Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.

CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.

The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit.  You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cash-flow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Yes, CPA can help you boost your business cashflow.

Don’t let your bankers control you,  contact CPA today.


Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

visit our late payment compensation page

See our full blog and FAQ on late payment compensation


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About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply to big companies like office outlet or small ones, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.

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