UK Contractors: Small business insolvencies down on last year

Small business owners, such as Limited company contractors, will be pleased to hear that the number of business insolvencies has gone down.

Findings from the Insolvency Service revealed that the number of insolvencies in England and Wales were down between April to June. 

According to figures, the number of companies entering creditors’ voluntary liquidation decreased for the fourth consecutive quarter.  In Q2 2014 it was 18.1% lower compared to the same quarter a year earlier, and the lowest since Q1 2008.

Insolvency Service deputy chief executive, Graham Horne, said, “The Insolvency Service supports people and businesses in financial difficulty, while protecting the interests of creditors. 

 

“Today’s figures show that more people have become insolvent than last year. There are a number of ways to manage debts over time, and it is important that people who need help should seek early advice. The Government-backed Money Advice Service has information on available advice. 



“More than half the people entering formal insolvency are now using individual voluntary arrangements (IVAs) to deal with their debts compared with other forms of personal insolvencies. Over the last year, there was a 20 percent increase in IVAs while bankruptcies and debt relief orders decreased. Company liquidations decreased over the last three months, reflecting a similar trend over the last year.”

 

Howard Sears, director of small business investor Astuta, added, “The latest company insolvency statistics are encouraging and reflect an economy that is now on firmer ground. 

 

“A 35% drop in companies entering administration is material and bodes well for the ongoing recovery of the economy. 

 

“Rate rises remain a threat but if the up-cycle is gradual and predictable rather than sharp and staccato, fewer companies may fall through the cracks than originally thought.”

If you’re interested in making the move from permanent to contracting, why not download our FREE 60 page guide to Contracting through your own Limited company.

How do you form your own Limited company? You can form your Limited company online by clicking here – it takes just 5 minutes to complete with your company set up within a few hours. If you have any further questions please contact our new business team on 01442 275789 or email newbusiness@sjdaccountancy.com.

For all other news please visit our Contractor News hub, or why not join us on Facebook and follow us on Google+ for all the latest contractor news, views, debates and competitions.