• Tue. Jun 25th, 2024

North East Connected

Hopping Across The North East From Hub To Hub

Struggling North East Business Owners Advised To ‘Look For Help’ After Highest Quarterly Corporate Insolvency Figures In 14 Years

R3 North East chair Chris FergusonR3 North East chair Chris Ferguson

The owners of struggling North East businesses are being urged to look for whatever help they need to resolve their financial challenges in the light of new figures showing the highest quarterly rate of corporate insolvency in England and Wales in 14 years.

Chris Ferguson, North East chair of insolvency and restructuring trade body R3, was speaking after data for the second quarter of 2023 revealed an increase of 8.9% on the number of corporate insolvencies during the first three months of the year and the highest levels of corporate insolvency since the aftermath of the financial crisis in the late noughties.

The latest Insolvency Service statistics show that there 6,342 corporate insolvency cases lodged across England and Wales between April and June this year, compared to 5,824 in the preceding three months. As the situation continues to worsen, more and more businesses in London are turning to registered Insolvency Practitioner London for help.

The new Q2 figure is 13.1% per cent higher than the same quarter in 2022 (5,606 cases), and more than double the 3,082 cases registered in Q2 2021.

And with little economic respite expected through the rest of the year, Chris Ferguson, who is director of recovery & insolvency at Gosforth-based RMT Accountants & Business Advisors, is advising concerned North East business owners to take proactive steps to address any financial difficulties they’re facing as quickly as they can.

He says: “More and more businesses are running out of road.  Directors are choosing to close businesses while the decision is in their hands, while an increasing number of creditors, including HMRC, are turning to winding-up petitions to recover debts they’re owed.

“When the pandemic ended, directors were optimistic that trading conditions would improve, but rising costs, supply chain issues and a consumer base that is tightening its purse strings means conditions continue to be incredibly difficult for most businesses.

“While the current economic climate remains, it’s likely more businesses will need to look to a formal insolvency process to deal with their financial issues, and we expect these figures will remain high throughout the rest of this year.

“North East business owners who are worried about their financial position should seek advice as soon as possible – having that early conversation can be hard, but doing so provides time to make important decisions about your business, it allows access to more potential restructuring solutions and generally leads to a better outcome for the business.”