Insolvency levels are down 1.3% across the UK as a whole for the first quarter of 2015 compared to the end of 2014, down to it’s lowest level since Q4 2007.
2,481 UK firms entered into a CVL in Q1 2015, down 3.7% since Q4 2014.
Possible reasons for this change include low interest rates and near non-flation of the economy which play a part in keeping businesses trading that may have otherwise been affected by insolvency action.
Clive Lewis, head of enterprise at Institute of Chartered Accountants in England (ICAEW) said he expected levels of insolvency to continue to fall as businesses are becoming increasingly cautious with their cash flow.
Clive said “ICAEW research on business’s cash surpluses conducted earlier in 2015 shows that around six in ten businesses currently hold a cash reserve, highlighting that lesson have been learnt. Perhaps more remarkable is that a similar proportion is also expecting to have a surplus next year. This suggests that businesses are reluctant to over-commit amid ongoing uncertainties both in the UK and overseas.”
In Scotland insolvencies have risen 13.8% in Q1 2015 compared to the same period in 2014 (396 to 450), making them the key exception to the rest of the UK.
David Menzies, director of insolvencies at the ICAEW commented on Scotland’s trend: “Many [businesses] suffer cashflow problems because of late-payment regime by many bigger businesses. I would encourage any future government to tighten this up to help bring down the number of insolvencies.”
Northern Island saw the largest fall in insolvencies with a drop of 6.8% with Wales at a close second with a fall of 5.7% for the first quarter of this year compared to the same period in 2014.