Company insolvencies rise as tax rises bite

The number of company insolvencies across England and Wales increased last month after firms faced rising costs.

Official data from the Insolvency Service showed there were 2,238 company insolvencies in England and Wales in May.

This was an 8% jump compared with April, and 15% higher than the same month last year.

The increase was driven by 1,734 creditors' voluntary liquidations. There were also 354 compulsory liquidations.

The Insolvency Service also recorded 136 company administrations and 14 company voluntary arrangements, CVAs.

Commenting on the figures, Mark Goodwin, Founder and Managing Director at Optimise said:

“The surge in company insolvencies last month comes as no surprise.

“Businesses were hit by tax rises in April including increased national insurance payments and the rise in the national minimum wage.

“It is not going to take much more to push the UK economy over the line into contraction in the months ahead.

"With the economy firmly stuck in reverse gear and company insolvencies continuing to rise, there are numerous legitimate legal claims against former directors that might not be pursued due to lack of funds. Optimise is here to bridge this gap, ensuring that insolvency practitioners and creditor estates receive maximum returns. By providing the necessary funding, we help ensure that justice is served and creditors are fairly compensated."

Optimise is currently funding in excess of £10 million worth of live claims covering directors’ loan accounts, breach of contract, breach of duty, transactions at undervalue, preference, unlawful dividends, wrongful trading and claims against third parties.