Insolvencies up in Scotland - 06/02/2012

The release of new figures from the Insolvency Service show a record number of companies in Scotland were served with a winding up order over the course of 2011.

Some 1,526 businesses fell into administration, liquidation or receivership in the 12-month period, which works out at more than four firms every day, reports the Scotsman.

Matt Henderson, a corporate insolvency partner at accountancy firm Johnston Carmichael, stated this is a concern "because, unlike other types of insolvency such as administration, it is not designed to save businesses".

Almost 400 companies were forced to close down in the last three months of the year alone, with 290 of these firms succumbing to liquidation at the end of 2011.

Bryan Jackson, a corporate recovery partner at accountancy firm PKF, added property-related businesses have been struggling at a high level in particular in recent months.

He noted: "Squeezed discretionary consumer spending is resulting in the hospitality sector also being hit."

Graeme Henry, head of business recovery at law firm HBJ Gateley, described the release of the figures as the "thin edge of the wedge" regarding firms being served with a winding up order.

He added: "These figures suggest there is still some significant pain in front of us as the economy recovers."

Factors blamed on the rise in the number of companies entering liquidation or insolvency over the course of the last 12 months included a lack of bank lending, as well as public sector cutbacks and weak consumer spending.

Sarah Cordey, spokeswoman for the British Retail Consortium, recently pointed out the next few weeks are going to be a key time for firms in the retail industry, due to the fact the coalition government is imposing a rise of more than five per cent in business rates in the near future, while growth in the sector has remained weak..

Need advice on Winding up Orders? Call 0800 9020123

Posted by Julie Cutts

Back to news index
Contact us