Business insolvencies increase by 2%

Latest figures from the Insolvency Service have shown that the number of business insolvencies in England and Wales increased by 2% in April 2026 compared to the previous month rising to 2,085 from 2,037. April’s figure was 3% up on the same month in 2025.

The data showed that there were  2,085 business insolvencies. The company insolvencies consisted of 371 compulsory liquidations, 1,510 creditors’ voluntary liquidations (CVLs), 183 administrations, 20 company voluntary arrangements (CVAs) and one receivership appointment.

CVLs accounted for 72% of all company insolvencies. The number of CVLs was similar to both March 2026 and the same month last year (April 2025). It was also similar to the average of the previous 12 months.

The number of compulsory liquidations was 19% higher than in March 2026 but similar to April 2025. April 2026 was the highest month for compulsory liquidations since February 2025, with the number being 24% higher than the average of the past 12 months.

There were 183 administrations, 21% lower than in March 2026, but 78% higher than in April 2025, and 47% higher than the 2025 monthly average. More than 100 connected companies in the Real Estate sector entered administration in March 2026, and 73 companies in the Real Estate sector entered administration in April 2026, so these higher numbers may be a one-off event rather than reflecting the underlying trend in administration numbers.

There were 20 CVAs this was the same as in March 2026 and 17% lower than in April 2025. Numbers remain low compared to historical levels. CVAs are not seasonally adjusted due to low volumes.

There was one receivership appointment in April 2026. 

Sonia Jordan, President of R3 and Partner at Knights, said “Corporate insolvencies increased by 2% in April, compared to the previous month, rising to 2,085 cases and by 3% compared to the April 2025. This means corporate insolvencies are at their highest number since June 2024. These consisted of 371 compulsory liquidations, 1,510 creditors’ voluntary liquidations (CVLs), 183 administrations and 20 company voluntary arrangements (CVAs).

“Insolvency numbers always reflect a range of underlying factors and while we have seen welcome economic growth in the first quarter of the year, the current environment remains challenging for businesses and households alike. Ongoing geopolitical conflict, coupled with economic and political uncertainty closer to home, is creating an unpredictable backdrop at a time when stability is badly needed.

“April saw an increase in costs for many employers following recent policy changes, including higher labour costs linked to the increase in the National Minimum Wage and rises in business rates for some firms, with hospitality, retail and leisure particularly affected.

“These have added to overheads, coming on top of higher fuel and energy costs and at a point when the labour market is already showing signs of strain, with unemployment rising to 5% while job openings have fallen by 3.9%.

“Recent high-profile cases, such as TG Jones, which plans to close stores and cut jobs, have highlighted the impact of rising and outstanding business rates liabilities on businesses’ financial positions.

“Meanwhile, company cashflows are also being affected by increasing numbers of late payments, as our latest Business Health Report revealed, with more than 1.5 million businesses affected. For a minority of firms, delaying payment has become embedded as a business practice, but this creates a domino effect across supply chains, placing particular strain on smaller businesses and pushing some towards insolvency. It is a positive development that the King’s Speech included Government plans to tackle this issue.”

Chris Tate, Restructuring and Insolvency partner at international accountancy and business advisory group Azets, said “April’s corporate insolvency numbers have been driven by a combination of geopolitical issues, legislative changes that will increase pressure on margins, ongoing cost challenges and customer caution, and creditors continuing to take an assertive attitude towards chasing down debts as they attempt to keep their own balance sheets in the black.

“Numbers have continued to rise this month, and the wider trend shows a rise in compulsory liquidations since January 2025 and a sharp rise compared to last month – a sign that creditors are resorting to the courts to recover what they’re owed. HMRC is leading the way on this in an attempt to recover funds for the public purse, and private sector creditors are following their lead so they can pay their own bills and settle their own debts.

“Creditors’ Voluntary Liquidations increased month on month as directors continued to shut the doors after running out of time, energy and options after years of tough trading conditions and in a market where many creditors lack the financial flexibility to overlook or negotiate on monies owed.

“Administrations fell compared to last month but were still at their second highest level since August 2023, which is a sign that there are still a reasonable number of firms for whom rescue is a potential option, and perhaps that some directors are seeking advice at an earlier stage than they have previously.

“The economic fallout of the war in Iran remains a key concern for many directors. Businesses are struggling with the further increase in costs the conflict has caused and are seeking advice about how to manage this in increasing numbers, while the ripple effect of the War has made finance less available and affordable, and restructuring work even more challenging.

“Closer to home, the introduction of new business rates and changes to the minimum wage may be the final straw for many firms who were keeping their heads above water, and while we don’t expect to see these translate into increased corporate insolvency numbers until the summer, they are likely to be another reason many firms are seeking advice now.

“The Bank of England’s decision to freeze the rate of interest will mean little relief for businesses when it comes to costs and access to finance – and has happened alongside with rising inflation and a seemingly unending period where expenses increased.

“There seems to be no break for businesses at the moment – trading conditions have been tough for a long time, and doesn’t show any signs of improving, and the instability at the top of Government over the last fortnight will affect clients, suppliers and finance, all of which will make the business climate more turbulent and make it harder for firms to stay profitable.

“From a sector perspective, the construction industry continues to grapple with rising costs and wages, payment issues and the ongoing impact of the Iran War on the price of materials. In an industry where tight margins and cashflow challenges are a way of life, this puts a further strain on businesses, many of whom have been battling rising expenses since 2020.

“Retail and hospitality firms have also been hit hard by the ongoing increases in costs and cutbacks in consumer spending. Households are keeping a sharp eye on their finances and the price increases many hospitality firms have had to introduce are too much at a time when their customers are only spending money on the essentials. Coming off the back of a Golden Quarter which had lost its lustre, this year is proving to be another tough one for both sectors – and has seen a number of established firms announcing site closures and restructurings as they attempt to stay solvent.”

Giuseppe Parla, Restructuring & Insolvency Director at Menzies said “Below the surface of an improving economy, we have a less confident consumer base, tax rises that have just come into force and an abrupt end to Covid-era relief. Around 40,000 businesses are still waiting on VOA appeals against rates assessments, some for close to a year, overpaying rates that just one in four will eventually get reduced. For businesses with unsuccessful appeals, this bill on top of rising employment, energy and borrowing costs risks pushing cash flow past breaking point. For many, this wait alone is the difference between survival and insolvency.”

“Persistent geopolitical tensions in the Middle East are compounding these issues, driving inflation and disruptions across supply chains, energy and fuel prices. For businesses already managing tight margins, these are pressures that are becoming increasingly difficult to absorb which poses a significant threat for the British economy and further elevations in company insolvencies.”

Oliver Collinge, Partner at PKF Littlejohn Advisory sayid “Company insolvencies in England and Wales hit 2,085 in April, up slightly from March and higher than a year ago, highlighting ongoing pressures on businesses.  The downturn appears to be widespread, with challenges emerging across a range of sectors from construction through to wholesale and retail trade, real estate and food and beverage companies. Rising costs, tighter credit, and uncertainty in demand are making the corporate environment tougher for many.

“With broader economic indicators providing mixed messages – the UK unemployment rate rose to 5% in the three months to March but the economy grew by 0.6% in the same quarter – it is important that businesses keep an eye on cashflow, plan ahead and seek support early if they are facing financial difficulties.” 

Simon Edel, Financial Restructuring Partner at EY-Parthenon, said “A fourth consecutive monthly rise in company insolvency activity, albeit modest, is the latest indicator of the impact that ongoing geopolitical turbulence and a challenging trading environment are having on UK businesses and their earnings.

“The increasing impact of the conflict in the Middle East chimes with our own analysis that over half of UK profit warnings since the outbreak have cited its impact. This impact is compounding existing pressures on companies, especially those in the most affected sectors such as travel and leisure, housebuilders and general industrials including chemicals, caused by higher costs, deteriorating consumer confidence and demand volatility.

“A sustained period of uncertainty is likely to embed a risk premium in exposed markets, with pressure concentrating in firms that are cash constrained, highly leveraged and operationally stretched. Companies need to be constantly redefining what resilience means in this lower growth, higher cost and unpredictable business environment.”