Coronavirus: Insolvency figures to be released monthly amid COVID-19 downturn

Lily Canter
The government has announced it will be releasing insolvency figures on a monthly basis for the foreseeable future. Credit: Getty
The government has announced it will be releasing insolvency figures on a monthly basis for the foreseeable future. Photo: Getty

Insolvency figures will be released on a monthly basis for the foreseeable future in response to the COVID-19 pandemic.

The number of company and individual insolvencies in England and Wales are normally released quarterly by the Insolvency Service, but these will now be broken down into monthly reports. Company statistics for Scotland will also be published each month.

Overall numbers of company and individual insolvencies dropped in the days immediately after the UK lockdown was applied on 23 March. This was due to courts and tribunals reducing their operations, HMRC decreasing enforcement activity and the Insolvency Service, insolvency practitioners, and Companies House having to adjust to new working arrangements.

The government also announced in late April that it would prevent the use of statutory demands and certain winding-up petitions from 27 April to 30 June 2020.

However, according to the Insolvency Service, the numbers of companies and individuals entering insolvency in April 2020 broadly returned to March’s pre-lockdown levels for most insolvency types.

READ MORE: More than half a million businesses face high risk of insolvency – survey

The latest figures show total company insolvencies decreased in April 2020 by 17% compared to the same month the previous year, with 1,196 company insolvencies in England and Wales. These included 933 creditors’ voluntary liquidations, 97 compulsory liquidations, 144 administrations, 21 company voluntary arrangements and one receivership.

The Accountant in Bankruptcy, Scotland’s Insolvency Service, reported that in April 2020 Scottish company insolvencies decreased when compared to April 2019, with compulsory liquidations falling by 74%.

Christina Fitzgerald, Vice President at insolvency and restructuring trade body R3, said: “The first set of monthly insolvency figures do not yet provide a particularly clear picture of how the pandemic is affecting insolvencies.

“Nevertheless, we welcome the Government’s decision to publish figures for insolvencies monthly rather than quarterly for the period of the pandemic, as these numbers will give more immediate feedback on how businesses, consumers and the wider economy are being affected.

“The Government’s support measures and policies for businesses and individuals have undoubtedly helped many stay afloat. Additionally, companies which planned for disruption in the case of a no-deal Brexit may find their preparations coming in handy to tackle disruption from a different source."

The individual and company insolvency statistics for May 2020 will be released on 12 June.