Insolvencies climb in 2018.

7/3/2019.

UK company insolvencies rose 19.3% in Q3 2018, data from the Insolvency Service shows.

A total of 4,308 businesses entered insolvency between July and September, with the construction industry seeing the highest number across all sectors.

Moore Stephens’ Duncan Swift commented: “The recent slowdown in the economy is now leading to more business closures rather than just business restructuring.” He added that many small firms are “struggling to stay in operation as they are unable to cover what might only be short term gaps in their order books.”

Companies in 2018

The underlying number of company insolvencies increased in 2018 to 16,090, the highest level since 2014.

17,439 companies entered insolvency in 2018, a rise of 0.7% on 2017. Total liquidations fell by 0.5% to 15,618; this consisted of an increase of 11.1% in compulsory liquidatons to 3,117 and a decrease in creditors voluntary liquidations (CVLs) of 3.0% to 12,501.

There were 1,349 bulk insolvencies in 2018, roughly half as many as in 2017. Excluding bulk insolvencies, there were 16,090 insolvencies in 2018, a 10.0% increase on 2017.

Excluding bulk insolvencies there were 11,152 CVLs (69.3% of total company insolvencies), 3,117 compulsory liquidations (19.4%), 1,464 administrations (9.1%), 356 company voluntary arrangements (CVAs, 2.2%) and 1 receivership.

Excluding bulk insolvencies, underlying company liquidations increased by 9.7% to 14,269 with CVLs increasing by 9.3%. This was the highest yearly total for company liquidations since 2013.

Compared with 2017, administrations in 2018 increased by 11.2%, and CVAs increased by 16.0%.

The estimated underlying liquidation rate in 2018 was 1 company liquidation per 249 of active companies, up from 1 in 264 in 2017.

All types of company insolvency increased in 2018 compared with 2017 except administrative receivership.

People in 2018

Total insolvencies increased for the third consecutive year to 115,299, the highest since 2011.

This was primarily driven by increases in individual voluntary arrangements (IVAs) which reached their highest annual total on record.

The number of people who became insolvent in England and Wales in 2018 was 115,299, a 16.2% rise on 2017 and the highest annual level of individual insolvencies since 2011.

There were 71,034 IVAs in 2018, an increase of 19.9% on 2017 and the highest annual level recorded.

There were 27,683 Debt Relief Orders (DROs) in 2018, which was a increase of 11.2% compared with 2017.

There were 16,582 bankruptcy orders in 2018, a 9.8% increase on 2017. Orders on the application of the debtor increased by 10.0%, while those on the petition of the creditor increased 9.1%.

IVAs were the most common insolvency procedure. Of the 115,299 people who became insolvent in 2018, 61.6% used an IVA, 24.0% used a DROs and 14.4% entered bankruptcy.

The year-end insolvency rate increased. 1 in 401 adults became insolvent in 2018, up from 1 in 466 in 2017.

Latest quarter (Q4 2018)

Total individual insolvencies increased to their highest level since Q2 2010 due to IVAs rising to a record high quarterly level.

Company insolvencies increased due to a bulk insolvency event; excluding these bulk insolvencies, the underlying number of company insolvencies in Q4 2018 decreased from the previous quarter.

Are you worried about your customers going insolvent?

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 of insolvency. 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 on credit, help us help you identify the risks.

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.

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.

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.

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 cashflow, 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 et your bankers control you,  contact CPA today.

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

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

 

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