The number of company insolvencies rose sharply at the start of the year, reaching a level not seen since the financial crisis, according to the latest figures from the Insolvency Service.
More than 1,900 businesses went under in January—10.7 per cent more than a year earlier—meaning nearly 500 firms a week were forced to fold.
Aside from 2009, when the economy reeled from the global credit crunch, last month’s total was the highest recorded for any January since official data collection began in 2000.
Tim Cooper, president of insolvency and restructuring trade body R3, highlighted that many of these cases were voluntary liquidations, suggesting owners were choosing to wind up solvent businesses. “Years of challenging trading conditions are taking a toll,” he said, “and with an increase in the national minimum wage and employers’ National Insurance contributions on the horizon, it appears some directors are stepping away before costs become unmanageable.”
From April, firms must grapple with Chancellor Rachel Reeves’s Budget measures, which include a £25 billion tax raid on employers through higher National Insurance. That same month, they also face a 6.7 per cent rise in the National Living Wage—exceeding most private-sector expectations.
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