The data most recently published by the Insolvency Service records that there were 1,560 registered company insolvencies in January 2022 which include Creditors’ Voluntary Liquidation (CVL), Compulsory Liquidation (where a Winding-Up Order is made by the Court following presentation of a Winding-Up Petition by a creditor), Company Voluntary Arrangements (CVAs) and administrations.
This figure is up approximately 5% from December 2021, is more than double the number of registered company insolvencies in January 2021 and is similar to the 1,508 registered company insolvencies pre-pandemic in January 2020.
CVLs have constituted the majority of registered company insolvencies since at least January 2019. In January 2022, CVLs comprised 87% of registered company insolvencies, which was 34% higher than pre-pandemic in January 2020 and more than double the number of CVLs in January 2021. This indicates businesses continue to face challenges as result of the Coronavirus pandemic and directors and/or shareholders of those businesses are opting to voluntarily wind up their Company.
Whilst the number of compulsory liquidations was more than double that in January 2021, the 118 compulsory liquidations was 60% lower than pre-pandemic in January 2020. This may partly be due to the restrictions still in place on Winding-Up Petitions which require creditors to issue a Notice pursuant to the Corporate Insolvency and Governance Act 2020 as amended by the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Amendment of Schedule 10) Regulations 2021 (SI 2021/1029) (“the Regulations”), allowing the Company to either make payment or put forward their reasonable proposals for payment within 21 days. Additionally, the debt must be for a liquidated sum of at least £10,000 and the debt must not be for rent or any other sum payable by a tenant under a ‘relevant business tenancy’ which is unpaid because of the financial effect of Coronavirus. These temporary measures are due to expire at the end of March 2022. This will relieve creditors of the additional requirements prescribed by the Regulations and significantly, will reduce the threshold of debt required to present a petition back down to £750.
Finally, there were 13 CVAs and 71 administrations in January 2022. These figures were 38% and 3% lower than January 2021 respectively, and both nearly 60% lower than the number of CVAs and administrations in January 2020.
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