Scottish business insolvencies rise by nearly a third

Annual figures from Accountant in Bankruptcy (AiB) have indicated that business insolvency numbers in Scotland rose by nearly a third (32.6%) in the year 2022-2023.

There were 1,132 business insolvencies an increase of 32.6% from 2021-2022’s figure of 854, an increase of 157.3% on 2020-2021’s figure of 440, and a rise of 19.4% compared to pre-pandemic levels in 2019-2020 (948).

Commenting on the figures, Richard Bathgate, Chair of insolvency and restructuring trade body R3 in Scotland and Restructuring Partner at Johnston Carmichael, said “The Covid hangover continues to hit Scotland’s businesses hard, with the figures published today showing that corporate insolvency numbers are at their highest level in a decade.”

“Creditors’ Voluntary Liquidation levels rose once again – to nearly double 2019’s figures, and to the highest levels on record. This suggests that more and more company directors are choosing to close their businesses before that choice is taken away from them, and that businesses who made it through the pandemic with support from the Government are considering whether the debt they’ve taken on is sustainable.”

“I would urge any director concerned about Bounce Back Loan repayments or other Covid-related loans to talk to their lender about what additional support options may be available.”

“However, the figures released today go beyond simply levelling out pre-covid insolvencies. With labour, stock, and energy expenses all surging, even previously successful businesses are now turning to an insolvency process to resolve their financial difficulties.”