Insolvency drop ‘calm before the storm’
Feb 05 2010
The insolvency storm is brewing
Fewer companies went bust in the last quarter of 2009 than in the third quarter.
Some 4,566 compulsory liquidations and creditors’ voluntary liquidations occurred in the last three months of 2009, a decrease of 1.7 per cent on the previous quarter and 1.1 per cent less than the same period a year ago.
Brian Johnson, insolvency partner at chartered accountants HW Fisher & Co chartered, says the drop in insolvencies reflects an unwillingness on the part of creditors to crack down on businesses that miss payments.
He adds: ‘While the banks are not extending credit, they also aren’t calling in debts. Likewise, the Inland Revenue has started to exert some pressure on companies that are stalling on their PAYE/NI and VAT bills, but they appear to be reluctant to adopt an overly aggressive stance. ‘The feeling among insolvency practitioners is that [this is] the quiet before the storm and the number of new cases will rise dramatically after the election.’
The total amount of company insolvencies was 19,077 in 2009, compared to 15,535 in 2008, according to figures from government body The Insolvency Service.
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