Scottish business insolvencies increase by 29%

The number of business insolvencies (liquidations and receiverships) in Scotland rose by 29.4% to 211 in July-September 2021 compared with April-June 2021 (163), and rose by 80.3% compared to July-September 2020 (117) according to latest Accountant in Bankruptcy (AiB) figures.

Creditors’ Voluntary Liquidations rose to 179 for July-September 2021 – an increase of 35.6% on the 132 recorded for April-June 2021 and of 159.4% on June-September 2020’s figures (69).

Commenting on the Scottish insolvency statistics for July-September 2021, Tim Cooper, Chair of insolvency and restructuring trade body R3 in Scotland and a Partner at Addleshaw Goddard, said “The quarterly and annual increase in corporate insolvencies has been driven by an increase in Creditors’ Voluntary Liquidations. This would suggest that company directors are choosing to close their businesses, having deemed their future success unlikely after trading for more than a year and half during a pandemic.

“The figures published today reflect the tough three months Scotland’s business community has experienced. Restrictions lifted in August, but it has taken time for trade to pick up and will be a while before it returns to pre-pandemic levels.”

“Businesses have also faced supply chain disruption, and international trade has been affected by both the pandemic and the change in our relationship with the EU.”

“UK Government initiatives like the furlough scheme have helped many, but we now face a difficult period where they have to manage without it while trading conditions haven’t returned to normal. This could make for a challenging three months in the run up to Christmas.”

“Given the circumstances, it’s no surprise that business optimism is softening, and many directors are concerned about the future and how they’ll pay their overheads and taxes.”