Creditor’s Voluntary Liquidations

• Advertisements for the appointment of a liquidator increased by 28%, from 1,016 in May 2021 to 1,303 in June 2021.
• The year-on-year figures for the appointment of a liquidator have almost doubled from 683 in June 2020 to 1,303 June in April 2021.

Administrations

• Advertisements for the appointment of an administrator increased by 10%, from 45 in May 2021 to 49 in June 2021.
• The year-on-year figures show a reduction of some 60%, from 121 in June 2020 to 49 in June 2021.

Compulsory Liquidations

• Advertisements for the making of a Winding Up Order remained stable, 39 in May 2021, 40 in June 2021.
• The year-on-year figures show a reduction of 28%, from 56 in June 2020 to 40 in June 2021.
• The number of Winding Up Petitions being advertised in The London Gazette in June 2021 was the same as May 2021, 54. They still remain significantly lower than in June 2020, 103.
• As a result of the UK Corporate Insolvency and Governance Act the Courts were unable to make a Winding Up Order on a petition presented between 27 April 2020 and 30 September 2020 unless it could be proved that the debtor was in financial difficulties irrespective of Covid-19. The deadline of 30 September 2020 has been extended on a number of occasions, the last one to 30 September 2021. It is now unlikely that these levels will begin to increase until early next year although there are rumours that the measures could be extended until 31 March 2022!

Despite the continuing support for businesses, insolvency numbers have been rising at a fair rate since January 2021 and Creditors Voluntary Liquidations are now exceeding pre Covid levels.

We suspect that this is just a natural correction as a result of the low numbers of insolvencies in the first 12 months of the pandemic and the numbers will remain fairly static over the next few months. Whilst there is the expectation that the numbers will eventually begin to rise again once Furlough ends, we do not believe that there will be a sharp increase in insolvencies whilst other support measures remain in place.

We understand that businesses will not be facing any pressure from Banks if they are struggling with loan repayments as long as they are in regular communication with the Bank. HM Revenue & Customs have confirmed a similar stance. However, these measures will only support a business for so long and if you have any clients that have any concerns about the future of their business, I am more than happy to provide confidential, no obligation advice with no initial charge.

In the unfortunate event that liquidation is required, we offer a low-cost liquidation service for companies with no assets and limited creditors. Our fee is fixed at £3,000 to include disbursements and VAT.

Solvent Liquidations

The number of Members Voluntary Liquidations since the pandemic have been significantly higher than in previous years possibly due to directors deciding to bring forward their retirement plans as a result of the uncertainty caused by the pandemic.

If you have any clients that are considering closing their business and retiring and require a solvent liquidation we offer a low-cost fixed fee of £1,500 plus disbursements and VAT for straight forward cash distributions.