Scottish business insolvencies increase by 47%

Latest figures from Accountant in Bankruptcy (AiB) have indicated that business insolvency numbers (liquidations and receiverships) in Scotland increased in September.

The figures showed that there were 103 company insolvencies registered in Scotland, 47% higher than the number in September 2021 and 36% higher than in September 2019. This was comprised of 25 compulsory liquidations, 69 CVLs, eight administrations and one CVA.

There were no receivership appointments.

Iain Fraser, Chair of insolvency and restructuring trade body R3 Scottish Technical Committee, said “The quarterly and yearly increases in corporate insolvencies, to the highest level since the beginning of 2020, has largely been driven by a rise in the number of compulsory liquidations.”

“Compulsory liquidations have risen more than 143% from the same period last year, and the key factor behind this is the end of the temporary legislation that altered the process and criteria for these, in an attempt to support businesses that were affected by the pandemic.”

“Supply-chain issues, spiralling inflation, and labour market shortages are all having a huge impact on Scottish firms’ ability to operate successfully, let alone grow, over the last quarter. And with further price rises such as the energy cap increase we saw at the beginning of October yet to be factored into the figures, it is likely that we will see corporate insolvencies continue to rise next quarter.”

“Scottish business owners need to think carefully about their next steps and plan for all scenarios. If there are issues coming up, like falling margins or overdue invoices, it’s far better to discuss them early when more options are available for finding a solution.”