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The number of businesses that went bust in August increased by 19 per cent year-on-year, official data has revealed.
The Office for National Statistics published new figures that showed there were 2,308 registered company insolvencies last month, compared to 1,941 in August last year.
Of the company insolvencies in August 2023, there were 1,880 Creditors’ Voluntary Liquidations (CVLs), which was 13 per cent higher than August 2022.
Read more: SME funding crisis: Insolvencies set to rise
There was a 45 per cent year-on-year increase in compulsory liquidations to 221, while the number of administrations rose by 68 per cent to 195.
“These statistics show that businesses are facing real pressure and that the increase in interest rates and the cost-of-living crisis are starting to filter through to businesses,” said Mark Supperstone, managing partner at business advisory firm ReSolve.
Read more: Commercial lenders urged to take closer look at borrowers’ financial health
“It is interesting to note such a significant jump in both CVLs and administrations this month, which follows on the back of high numbers in the previous month (July). The increase in administrations, for a second month in a row, is particularly interesting as this suggests more businesses are seeking rescue options.
“HMRC winding-up petitions are also at the highest level since the pre-pandemic era. It appears HMRC is taking a much more aggressive approach to its collection processes at a time when businesses are facing a plethora of challenges. As we see CBILS loans becoming due for repayment there may be additional pressure on businesses, with the construction and retail industries in particular likely to be heavily impacted.”
Read more: Company insolvencies hit 14-year high
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