Credit, Collections & Insolvency News
Latest Accountant in Bankruptcy figures have shown that business insolvency numbers (liquidations and receiverships) in Scotland for Q1 2025-2026 increased by 17.3% compared with Q1 2024-2025, to a total of 332.
The number of business insolvencies (liquidations and receiverships) in Scotland for Q1 2025-2026 increased by 12.9% compared with the previous quarter’s total of 294 (January-March 2025).
Tim Cooper, Immediate Past President of restructuring, turnaround and insolvency trade body R3 and Partner at Addleshaw Goddard LLP, said “Corporate insolvency activity in Scotland is picking up pace, with more firms entering an insolvency process last quarter than at any point in the past two years. This upward trend stands in contrast to England and Wales, where corporate insolvency numbers increased only slightly on the quarter and fell year-on-year. The more significant rise and overall upward trend in Scotland has been driven largely by a significant increase in Compulsory Liquidations, which have reached their highest level in six years, a high proportion of which are driven by HMRC, indicating a more robust approach to tax debt collection and enforcement, and other creditors adopting a similar and more active approach through the courts.
“Creditors’ Voluntary Liquidations have dipped slightly compared to both the previous quarter and the same period in 2024. This all paints a picture in the Scottish economy of businesses struggling with liquidity to pay creditors as they fall due, with creditors including HMRC taking proactive court action to enforce payment or bring businesses to a close and prevent further losses.
“From a voluntary liquidation perspective, there may be hesitation among directors to take decisive steps in the current climate, or that they are able to find other avenues towards rescue and recovery including creditor support and forbearance which avoids an insolvency or otherwise enables a solvent closure. That said, Members’ Voluntary Liquidations remain above last year’s level but have fallen from the heightened numbers seen in late 2024 and early 2025, when many directors accelerated closures to benefit from the lower Business Asset Disposal Relief rates ahead of planned tax increases.
“There are indications that momentum in Scotland’s economy is stalling, and these latest figures indicate more businesses in Scotland are paying the price. Amid high operating costs, low confidence, and persistent inflation, many firms are facing tough choices around whether to keep trading, let alone grow. Rising costs from the National Minimum Wage and employers’ National Insurance contributions at the start of this quarter, combined with concerns over potential autumn tax hikes and tariffs, are clouding decision-making and forcing many firms into a holding pattern as they wait for greater certainty.
“Hospitality and retail businesses remain under significant pressure. After a period of relative resilience, activity in both sectors is starting to dip as fewer people are dining out, travelling midweek or spending on non-essentials. For smaller venues and high street shops outside of major cities, this shift is being felt more sharply as margins shrink and footfall fluctuates. Scotland’s capital is seeing a stronger performance, but this is not the picture everywhere and for many firms, stability still feels out of reach.
“Looking ahead, the summer calendar of major events like the Edinburgh Fringe may bring a welcome, if temporary, boost to some consumer-facing businesses, but the wider backdrop remains challenging. While there are moments of optimism, recovery is fragile, and for some, the pressure is proving too much.”
