Credit, Collections & Insolvency News
Latest annual data analysis by the Accountant in Bankruptcy has shown that there were 1,175 corporate insolvencies in the year 2024-2025. This was a slight increase of 0.6% from 2023-2024’s figure of 1,168, and an increase of 3.8% on 2022-2023’s figure of 1,132.
Separate quarterly figures (fourth quarter 2024-25) showed that registered companies becoming insolvent or entering receivership decreased when compared to the same quarter in 2023-24, with 294 companies becoming insolvent, 2.3% less than the fourth quarter of 2023-24, where 301 companies became insolvent.
Commenting on the data, Tim Cooper, President of insolvency and restructuring trade body R3 and Partner at Addleshaw Goddard said “The increase in corporate insolvencies is due to a rise in compulsory liquidations. While figures for this process are not yet at pre-pandemic levels, they have increased since last year and significantly increased since the 2022-23 financial year. We have seen an increase in creditors’ willingness to actively pursue debts, with HMRC the largest and most common applicant to issue a winding-up order in an attempt to recover money for the public purse, and private sector creditors following them in an effort to balance their own books.
“Members’ Voluntary Liquidation levels have also increased compared to last year, with a big increase in numbers in between Q2 and Q3 of this year. It may be that the prospect of having to navigate the rises in National Insurance and Minimum Wage, which came in at the start of this month, was too much for some directors and led to them closing their firms while they were still solvent and while the choice to do so was theirs.
“For many Scottish businesses, 2024 was less about growth and more about staying afloat. Economic growth remained sluggish and much of the momentum from earlier in the year gave way to flat conditions by the end of the Q4. Firms across a range of sectors have faced rising costs, weaker demand, and growing uncertainty about the broader economic outlook, all of which have made it increasingly difficult to plan and operate with confidence.
“Rises in Employers’ National Insurance and the National Minimum Wage in the Autumn Budget caught many businesses off guard. These increases will particularly affect businesses with a high proportion of lower-paid or part-time roles, including those in retail, hospitality, and social care. As the changes take effect, the pressure on margins is being felt across the board, and business owners are facing difficult decisions about how to manage through an already tough environment.
“Looking ahead, it is clear that 2025 won’t be without its challenges. Cost pressures remain a real concern, and with growth expected to stay subdued, many firms will be working hard just to maintain stability. There is also uncertainty around global trade, particularly with new US tariffs on the horizon, which could affect some of our key exporters. While a degree of stability is welcome, conditions remain difficult, and many businesses will be focused on adapting to what could be another uncertain year.”
