The number of corporate insolvencies increased by nearly 13 percent from 2015 to 2016 – to a total of 16,502.
The Insolvency Service, which released the official statistics on insolvencies today (January 27) said the rise was primarily caused by 1,796 connected personal service companies entering liquidation in the final quarter of 2016, following changes to claimable expenses rules.
All other types of corporate insolvency fell in 2016. Administrations fell by nearly four percent compared with 2015, company voluntary arrangements by around seven percent and receiverships by more than half.
The Insolvency Service said the majority of corporate insolvencies, 11,900, were resolved using creditor voluntary liquidations.
Andrew Tate, president of R3, said: “Despite a number of challenges for businesses in 2016 – the fall in the value of the pound since June’s EU referendum and the introduction of the National Living Wage among them – there is still a lot of downward pressure on corporate insolvency numbers to balance these out.”
He said businesses are now enjoying a safety net compared to the pre-financial crisis economy and companies are benefiting from record low borrowing costs.