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Insolvency risk will grow as help fades
An insolvency expert has warned Lancashire businesses they are at greater risk of going bust now than during the depth of the recession.
Matt Dunham, regional chairman for insolvency trade body R3, said firms risked going under as the support programmes which have kept them
afloat in recent weeks are withdrawn by cash-strapped Government officials.
His warning came as new figures showed the number of company insolvencies broke the 19,000 barrier last year, the highest level since 1993, despite HM Revenue and Customs offering all firms a 'tax holiday' through its Time to Pay scheme.
A record 134,142 people were declared insolvent in England and Wales in 2009, according to the Insolvency Service.
Mr Dunham said: "The last few months of 2009 were relatively quiet for insolvency practitioners as the 'Time to Pay' scheme kept some businesses from going bust and banks continued to lend their support.
"But, businesses need to be aware of the 'insolvency lag' because, although the overall economic outlook is brighter, this is the most dangerous time for businesses.
"Creditors will begin to attempt to collect money owed and policy-makers will phase out support measures."
He said the experience of other recessions had shown it can take years after the recovery for levels of insolvencies to even out and advised any firm seeing warning signs to seek advice early.
The quarterly breakdown of insolvency figures shows an improving national picture with the number of firms in liquidation falling by 4% between the third and fourth quarter.
The figures show 4,372 firms went into liquidation in the final three months of 2009, which was down 3% year-on-year.
There was also a significant decline in the number of company administrations, which is often a more representative measure of corporate failures.
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Friday 10 February 2012
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