Latest figures released by Accountant in Bankruptcy (AIB) have indicated that Scottish business insolvencies rose by 67% in June 2021.
The figures show that there were 77 company insolvencies registered in Scotland, this was 67% higher than in June 2020 and 13% higher than in June 2019. This was comprised of 14 compulsory liquidations, 62 CVLs and one administration. There were no CVAs or receivership appointments.
Historically, the volume of company insolvencies registered in Scotland has been driven by compulsory liquidations. However, since March 2020, there have been nearly twice as many CVLs as compulsory liquidations.
The number of registered company insolvencies was similar to pre-pandemic levels.
Commenting on the figures, Iain Fraser, Chair of insolvency and restructuring trade body R3’s Scottish Technical Committee, said “The quarterly increase in corporate insolvencies was driven by an increase in Creditors’ Voluntary Liquidations in June – to the highest total number for this process in two years. The corporate insolvency figures reflect the tough three months the Scottish business community has been through. With an uneven easing of restrictions across the country, a number of businesses are still adapting to the ‘new normal’ and will have to wait a while before they return to pre-pandemic trading.”
“However, in spite of this, there are some reasons for optimism. Scotland’s economy continues to recover, and business confidence in Scotland rose to the highest level in the UK in June, although times remain tough for the retail, hospitality and nightlife industries.”
“Alongside this, we’re seeing a drop in unemployment, an increase in the number of job vacancies, and more people returning to work from furlough as the economy reopens.
“Hopefully the tide will start to turn for businesses as restrictions ease further in August, the vaccine rollout continues, and the economy continues to reopen and recover.”