Surge in company closures

Research published today by City AM has found that businesses across Britain are being shut down at a rate not seen since the financial crash.

In a major warning sign for the health of the UK economy, more than 1,100 companies have faced winding-up orders in the first fifteen weeks of 2025, according to an analysis of published insolvency notices - an increase of nearly a quarter compared to last year and the fastest rate of corporate closure since 2010. Nearly 2,200 businesses have also faced winding-up petitions - an increase of more than a fifth since 2024 and the highest rate since 2012.

Over one in ten of the more than 300 companies facing winding-up petitions so far in April alone were retail and hospitality businesses, the analysis found, in signs high street businesses were being crippled by rises to employer taxes unveiled in the Autumn Budget.

City AM’s research follows on from business closures in the UK surging to their highest level since 2021, according to latest data from the Insolvency Service. Last month was the second worst for insolvencies since Covid restrictions were lifted, beaten only by October 2024, when 2,701 businesses closed their doors.

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

“Businesses are facing the toxic combination of rising costs and taxes.

“This month’s rise in employer NICs, together with the higher National Living Wage, could lead to job cuts and price rises in the months ahead.

“The impact of US tariffs is also significant, with 62% of UK firms with trade exposure to the US reporting negative effects, according to the British Chamber of Commerce.”

Continued Mark: “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.