Stats released today by The Insolvency Service unveiled a 6% increase in company insolvencies in the year ending January 2025 compared to the month before, and 11% more than in January 2024, as the dust beings to settle following a disruptive Autumn Budget for British business.
According to Giuseppe Parla, Business Recovery Director at Menzies, December stats bucked the trend, and a January hike in corporate insolvencies may have laid the foundations for a tough year ahead:
“While December figures painted a picture of economic stability, January delivered a new wave of corporate insolvencies as British business continues to be hit hard. Despite a recession ‘near-miss’, many businesses are cutting their losses with prices rising 2.5% in the 12 months preceding December, alongside a heavier tax burden.
And for businesses looking to cover costs through an exit, previous increases to business asset disposal relief (BADR) and capital gains tax (CGT) hikes will mean reduced asset values and higher tax liabilities – meaning lower returns and less disposable funds”
Giuseppe continues, stating British business are in need of more support: “Cuts to the bank base rate however may provide a lifeline for many businesses calling out for affordable borrowing. But for many, this could be the final straw in the pursuit of business continuity. All eyes now turn to the Treasury: will the Spring Forecast deliver further hope for growth or a return to doom and gloom for British business?”
“As ever, our message would be for businesses to act early if they anticipate financial trouble. Doing so ensures that more options are available for you to secure a profitable future and remain trading.”
