England and Wales saw a 20% increase in the number of bankrupt companies, or a fifth, compared to August last year, due to the impact of high interest rate losses and falling sales on companies facing financial difficulties.
Flag of the United Kingdom - Source: The Guardian
2308 companies collapse in England and Wales
According to the Insolvency Service, 2,308 businesses collapsed in England and Wales in August, representing a 20% increase compared to August 2022, which is higher than pre-pandemic levels, with builders, retailers and manufacturers topping the list of sectors most affected by corporate bankruptcies.
The Water Industry is bankrupt.
It's time to renationalise.Mounting debts and public anger could finally sink water companies in England and Wales https://t.co/PwQx8ftxwc
— Sam🐟❤🌈😷🌍 (@CounsellingSam) July 5, 2023
Retailer Wilco, which faced a crisis on Aug. 10 and subsequently went bankrupt with the loss of 12,500 jobs and the closure of 400 stores, is expected to report additional bankruptcies during the remainder of the year.
The Insolvency Service reported that one of the biggest contributing factors was the action taken by the tax authority, where the number of unpaid tax liquidation requests had increased in recent months.
Number of liquidations 1880
According to the details of the figures, most of the increase is due to the increase in voluntary liquidations of creditors, where the company is voluntarily liquidated either by its directors or shareholders, and the number of liquidations reached 1880 last month, which equates to an increase of 13% from August 2022.
The Department of Revenue, Customs and other creditors received termination orders for 221 mandatory liquidations in August, representing a 45% increase from August 2022.
Insolvency practitioners noted that the UK was able to avoid the expected corporate collapse in the months following the Covid-19 pandemic for the first time in 2020, however, it is now seeing the effects of stricter and more expensive lending on the finances of companies that have been compromised by the rising cost of living.
