Calm before the storm

Trade body R3 has warned the latest insolvency figures could represent "a calm before the storm". A survey of insolvency practitioners in the North West revealed more than a third thought the number of insolvencies will peak in 2011, while half believe it will be in 2012 or beyond.

Statistics indicated that business insolvencies fell by 20 per cent across the board during the third quarter of the year, compared to the same period in 2009.

Many businesses are being kept alive artificially by low interest rates and HM Revenue and Customs time to pay agreements. Inevitably, these will come to an end pushing many more businesses into insolvency.

According to the Insolvency Service, there were 3,974 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the third quarter of 2010 – down 2.2 per cent on the previous quarter and a decrease of 13.9 per cent on the same period a year ago.

Additionally, there were 1,141 other corporate insolvencies in the third quarter made up by 349 receiverships, 633 administrations and 159 company voluntary arrangements.

In total these represented a decrease of 27.7 per cent on the same period a year ago.