BSR
BSR
  • Home
  • Distressed Businesses
    • All Distressed Businessess
    • Administrations
    • Liquidations
    • Winding Up
    • Insolvency Advice  New
  • Buy a Business
    • All Businesses for Sale
    • Find a Business for Sale
    • Raising Business Finance
    • Buyer Acquisition Service   New
    • Escrow Service   New
  • Sell a Business
    • Sell Your Business
    • Seller Accounts
    • Need Help Selling?
    • Help With Finance New
    • Business Valuation
    • Business Wanted Adverts
  • Insights & News
    • View All News
    • View All Insights
  • Off-market
    • Source deals
  • Log In
  • Join Now
Join now
11111111

Home / News / Insolvencies rise in December with challenges set to continue for business owners

Insolvencies rise in December with challenges set to continue for business owners

Thu, 20 Jan 2022 | BUSINESS NEWS

Insolvencies rise in December with challenges set to continue for business owners

New figures from the Government Insolvency Service have shown that corporate insolvencies increased towards the end of 2021, a trend that is forecast to continue in 2022 with businesses being warned of a challenging year.

There were 1,486 corporate insolvencies in December 2021, a 20 per cent increase on December 2020’s figure of 1,237 and 33 per cent higher than the 1,120 insolvencies recorded in December 2019, prior to the onset of the COVID-19 pandemic.

December 2021 also saw 1,365 Creditors’ Voluntary Liquidations (CVLs), a 37 per cent increase on December 2020 and up 73 per cent compared to December 2019. Despite this, compulsory liquidations and other types of insolvencies remain lower than their pre-pandemic levels.

There are numerous factors being cited for the increases in corporate insolvencies and CVLs, the most immediate issue at the end of last year arguably being the introduction of Plan B COVID-19 measures in response to the emergence of the Omicron variant. This hit sales for many businesses over what would normally be their busiest period in the run up to Christmas.

Other contributors to increasing CVLS and insolvencies have been the need for companies to begin paying deferred tax bills and repaying government-backed loans issued under the Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS).

The government’s ending of temporary insolvency measures in October 2021 is also being cited as a major contributor to the rise in CVLs, with business owners opting to put their company into insolvency rather than face enforcement action from creditors.

As 2021 ends, business owners will continue to face the pressures of COVID-19-related disruption, unsustainable debt and the threat of creditor action. As a result of this, insolvencies and CVLs are being forecast to continue rising during 2022.

Other pressures impacting businesses at the start of the new year include supply chain issues, staff shortages and the rising costs of raw materials post-Brexit, issues that have hit sectors such as construction and haulage particularly hard. For smaller, high growth-potential businesses, meanwhile, rising debts and increasing costs are being exacerbated by a lack of investment, threatening their prospects for growth.

Oliver Collinge, leading restructuring and insolvency professional at PKF GM, said: “Many distressed businesses have managed to keep afloat by making use of the high level of government support available. However, as businesses have now started to repay BBLS and CBILS loans as well as deferred HMRC liabilities, pressure on cash is growing and we may continue to see the overall number of business failures increase.”

“Higher inflation, staff shortages, increasing energy prices, supply chain challenges and the need to repay Covid incurred debt, are all likely to lead to increased numbers of insolvencies during 2022.”

“These challenges will put multiple added pressures on businesses in the coming months, particularly those that weren’t in robust financial health before COVID, so it’s critical businesses act early and seek advice if they are struggling now, or think cash flow may be squeezed in coming months. The earlier they act, the more options they’ll have to continue trading and recover.”


View the latest distressed UK businesses here.

Read our outlook for UK M&A in 2022.

Looking to sell your struggling business? Read our guide to selling a company prior to insolvency.


Share this article



Latest Businesses for Sale

HR Consultancy Practice
UK Wide

An outsourced employment law and HR specialist offering a comprehensive range of services for clients throughout the UK.

Asking Price: Offers Invited
Turnover: £500,000

LEASEHOLD


Provider of Bespoke Art Conservation & Restoration Services
UK Wide

The company offers personalised services to a growing client base, ensuring all art mounting, conservation and restoration requirements are met by a team of highly skilled specialists. Serving museums, galleries, Government departments and private co...

Asking Price: Offers Invited
Turnover: £695,000

LEASEHOLD


Provider of Windows & Doors Solutions
North West, UK

Based in north West England. The business supplies, installs and maintains high-quality window and door systems for its clients. The company has developed a strong reputation due to a proven track record of supporting its customers and local communit...

Asking Price: Offers Invited
Turnover: £1,000,000

FREEHOLD



View more businesses for sale

News Search

Latest News

 
27
 
Jan
 

Administrators to sell assets as office furniture maker collapses | ADMINISTRATION

Bluespot Furniture, a West Yorkshire-based furniture manufac...

 
26
 
Jan
 

UK M&A down 16 per cent in 2022, but sentiment remains optimistic | BUSINESS NEWS

New analysis from PwC has revealed that UK M&A activity decl...

 
26
 
Jan
 

Private equity-backed law firm targeting further M&A in 2023 | BUSINESS NEWS

Stowe Family Law, a Leeds-headquartered specialist family la...

Free guide: 10 Biggest Buyer Mistakes

Sign up to receive our acquisition alert emails to get your FREE guide

Email


Related News

 
27
 
Jan
 

Administrators to sell assets as office furniture maker collapses | ADMINISTRATION

Bluespot Furniture, a West Yorkshire-based furniture manufac...

 
26
 
Jan
 

Private equity-backed law firm targeting further M&A in 2023 | BUSINESS NEWS

Stowe Family Law, a Leeds-headquartered specialist family la...

 
26
 
Jan
 

UK M&A down 16 per cent in 2022, but sentiment remains optimistic | BUSINESS NEWS

New analysis from PwC has revealed that UK M&A activity decl...

Want access to the latest businesses for sale?

Business Sale Report is your complete solution to finding great acquisition opportunities.

Join today to receive:

  • Comprehensive range of businesses for sale
  • Make direct contact with business sellers or their intermediaries
  • Access to all UK administrations, liquidations and winding-up petitions
  • Daily email alerts for the latest businesses for sale & distressed notifications
  • Business Sale Report publication posted to you every month
  • Advertise your acquisition requirements on our "business wanted" section

All this and much more, including the latest M&A news and exclusive resources

Become a Member

News Categories

  • - Business Sale
  • - Division Sale
  • - Administration
  • - MBO/MBI
  • - Merger
  • - Commercial Property

View all news

logo
Our Services Distressed Businesses
  • Businesses for Sale
  • Distressed Companies
  • List a Business
  • Help with Finance
  • Buyer Acquisition Service
  • Small Businesses for Sale
Company Buy a Business
  • About BSR
  • Insights
  • News
  • FAQs
  • Reviews
Get In Touch
020 8875 0200
[email protected]
167 Oakhill Road, London, SW15 2QW
Working hours: Mon-Fri, 9am - 5:30pm
About BSR
Business Sale Report is the UK's leading
independent business for sale & distressed business listing service.
Established in 1995, BSR offers an up-to-the-minute, comprehensive overview of businesses for sale, latest distressed business listings and daily acquisition news.
Subscribe

Subscribe to our newsletter to receive news about the latest businesses for sale.

  • Terms
  • Privacy
  • linkedin
  • facebook
  • twitter
© 1995-2023. Business Sale Report Ltd. All rights reserved. www.business-sale.com.