Corporate insolvencies down

In welcome news for the business community, corporate insolvencies are down according to the Insolvency Service. There were 4,082 compulsory liquidations and creditors' voluntary liquidations in total in England and Wales in the first quarter of 2010 (on a seasonally adjusted basis). This was a decrease of 8.4% on the previous quarter and a decrease of 17.8% on the same period a year ago. Company Voluntary Arrangement (CVA) numbers have remained stable and have been seen as a useful rescue tool.

However, for people in the industry there is a feeling that the figures are only lower due to the HMRC "time to pay" policy where businesses can negotiate very good terms to pay VAT and PAYE owing. The Begbies Traynor Red Flag Alert backs this up as it has reported an increase in businesses facing financial problems that have not been reflected in the insolvency figures. The significant debts owed by businesses to government have not been called in for now. As pressure increases to pay back the deficit it is likely that there will be more corporate failures going into 2011. As the economy improves there will be opportunities for investors to take advantage by buying up struggling companies to increase market share. For a list of struggling companies we have published our list of businesses facing winding-up petitions.

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