4R Blog

RSS Feed

Scottish insolvencies drop in second quarter

Date Added: 25/07/2013  

The number of firms based in Scotland that are becoming insolvent is falling compared to last year, according to a new report.

Data revealed in the latest Accountant in Bankruptcy (AiB) figures showed 184 Scottish companies went bust between April and June, which is a fall of 56.2 per cent compared with the same quarter in 2012.

However, the figures reveal that insolvencies in Scotland during the second quarter were higher than in the first three months of the year, when 143 companies went out of business.

Bryan Jackson, business restructuring partner at BDO LLP, stated that the AiB data shows the expected upturn in the economy has not arisen for a lot of firms in Scotland, many of which are finding they are having to survive on a month-to-month basis.

Those that are struggling may need to take business debt advice in the coming weeks and months if they are to avoid being served with a winding up order.

"While there are signs that some sectors such as manufacturing are improving, it is clear that retail, hospitality and construction are still being adversely affected by the recession. In particular, for businesses which rely on discretionary spending, there remains a real problem due to a lack of consumer confidence," said Mr Jackson.

He added the increase in corporate failures compared with the first quarter of the year should not surprise anyone due to the fact that the economy remains subdued.

This comes shortly after it was revealed by the latest zombie business tracker from R3, the insolvency trade body, there are now 134,000 UK firms that are struggling to pay their debts.

However, the report showed that the number of zombie firms - which means those only able to cover the interest on their debts, without reducing the total amount that they ower - has fallen over the last year from 146,000 to 108,000.

Need advice on Winding up Orders? Call 0800 9020123

Posted by Miles Pritchard

Get the Help You Deserve

0800 90 20 123

Urgent Help Call 24/7

020 7183 2606

We'll Call You

Request a Callback