Monthly insolvency statistics – April 2023

A snapshot of corporate and personal insolvencies across the UK in April 2023.

Corporate Insolvencies

England and Wales

The number of registered company insolvencies in April 2023 was 1,685, 15% lower than in the same month in the previous year. However, this was 18% higher than in April 2019. Creditor Voluntary Liquidations were lower than April 2022 but Compulsory Liquidations, Administrations and Company Voluntary Arrangements were higher. The numbers of Compulsory Liquidations have increased from historic lows seen during the coronavirus pandemic, partly as a result of an increase in winding up petitions presented by HMRC.

Creditors Voluntary Liquidations (“CVLs”) totalled 1,368, 23% lower than April 2022 and 34% higher than in (pre pandemic) April 2019. 

Compulsory Liquidations (“WUCs”) totalled 183, almost twice as many as April 2022 but 22% lower than April 2019.

There were 122 Administration appointments which is 8% higher than April 2022 but 16% lower than pre pandemic levels.  

There were 12 CVAs in April 2023, 20% higher than April 2022 but 54% lower than April 2019.  

Scotland

In April 2023 there were 114 company insolvencies registered in Scotland, 24% higher than the number in April 2022. This was comprised of 41 Compulsory Liquidations, 64 CVLs and 9 Administrations. There were no Receivership appointments or CVAs. 

Northern Ireland

In April 2023 there were 8 company insolvencies registered in Northern Ireland,38% lower than April 2022. This was comprised of 4 CVLs, 2 Compulsory Liquidations and 2 Administrations. There were no CVAs or Receivership appointments. 

Personal Insolvencies

England and Wales

Personal insolvency numbers are now beginning to show some signs of increasing, as interest rates hit a 15-year high and the cost-of-living crisis takes effect. Personal insolvencies are almost certain to show a more marked increase into the second half of 2023 but remain quite volatile month to month.

There were 6,613 Breathing Space (BS) applications in April, against the usual monthly average of around 5,900. This trend might be a significant indicator of things to come.

With clamping down on poor advice and better signposting by the regulated debt advice sector, we expect the BS monthly figure to show a continued steady upward trend. As BS is merely a pause in the debt settlement process, it would not be surprising to also see the DRO, bankruptcy and IVA numbers rise once the BS period expires for these individuals.

April’s Mental Health BS application figure of 128, given the stringent entry criteria, is another significant indicator as to the nation’s wider mental health crisis.

There were 6,336 Individual Voluntary Arrangements (IVA’s) on average in the 3-month period to April, which is slightly below the usual 6,700 per month seen since 2019.

It will also be interesting to see whether the increased BS applications do now drive the IVA figures downwards as better, regulated advice begins to take effect.

In 2019, there were 2,289 Debt Relief Orders (DRO’s) a month on average, and following the changes in entry criteria from June 2021, surprisingly they have only averaged around 2,000 per month. The April figure of 2,384 might suggest a slight uptick in DRO’s but some organisational changes in the administration of DRO’s in February may be the true reason for the last two months’ spike in registrations.

A “new” DRO would have previously been a no-asset bankruptcy and therefore, the record low bankruptcy numbers of 2021/22 were of no real surprise. The average monthly bankruptcy numbers in 2019 were 1,395, made up of 1,134 debtor’s applications and 261 creditor petitions. The stark decrease from that period to the current numbers is clear against the last 12-month averages of 564 bankruptcies, made up of 463 debtor’s applications and 101 creditor petitions per month.

In April, there were 531 bankruptcies, against a 2022 average of 557 per month. We expect the bankruptcy numbers to steadily pick up, showing a more marked increase into the second half of the year.

Bankruptcy petitions will undoubtedly have to be issued by creditors to recover debts incurred during the pandemic, and as a result of current economic pressures, led by HMRC in the recovery of unpaid tax liabilities. In April, there were 113 creditors’ petitions, which is slightly up on the preceding 12 months’ average. 

Northern Ireland

In April 2023 there were 110 individual insolvencies in Northern Ireland, 32% lower than in April 2022. This consisted of 85 IVAs, 18 DROs and 7 bankruptcies.

_{Mazars is an internationally integrated partnership, specialising in audit, accountancy, advisory, tax and legal services*. Operating in over 90 countries and territories around the world, we draw on the expertise of more than 42,000 professionals – 26,000+ in Mazars’ integrated partnership and 16,000+ via the Mazars North America Alliance – to assist clients of all sizes at every stage in their development. *Where permitted under applicable country laws Mazars LLP is the UK firm of Mazars, an international advisory and accountancy organisation, and is a limited liability partnership registered in England with registered number OC308299. A list of partners’ names is available for inspection at the firm’s registered office, 30 Old Bailey, London EC4M 7AU. Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001139861.}