Latest news with #TomRussell
Times
9 hours ago
- Business
- Times
Insolvencies rise as firms face tariffs and higher costs
The number of businesses becoming insolvent rose sharply last month as companies faced higher staff costs and continuing uncertainty over trading arrangements with the United States. Business insolvencies in England and Wales rose 15 per cent to 2,238 in May compared with the same month a year ago, according to data from the Insolvency Service. The figures showed that the number of creditors' voluntary liquidations, through which a director chooses to close down the business, rose by 13 per cent to 1,734, while the number of company administrations, which usually involve larger enterprises, was up by 12 per cent to 136. Businesses started paying higher national insurance contributions for employees in April and also faced an increase in the national minimum wage. The corporate environment has also been hit by uncertainty over tariffs, although Britain has now signed a trade deal with the US. Tom Russell, president of R3, the UK's insolvency and restructuring trade body, said the uncertainty over trade costs had made 'medium and long-term planning more difficult' for companies. Mark Ford, partner in the restructuring team at S&W, the professional services firm, said: 'The impact of sluggish economic growth, high borrowing costs, low consumer confidence and high inflation in recent years has eroded cash reserves for businesses and left some in a perilous position. 'Businesses are now facing newer challenges that threaten their viability and this means we are likely to continue to see a steady stream of company insolvencies in the coming months. 'Higher costs resulting from increases to employer national insurance contributions, the minimum wage and business rates are all heaping considerable pressure on businesses, particularly those that feel they are unable to increase prices for fear of losing customers.' Kathleen Garrett, partner at Reed Smith, the law firm, said the Bank of England's decision to hold interest rates on Thursday showed that while borrowing costs were falling, they were facing 'a much more gradual descent than many would have hoped'. She added: 'Businesses are facing a raft of challenges which have caused insolvencies to start rising again. The headwinds from additional business costs such as the recent increases to national insurance and a fraught geopolitical environment in terms of tariffs and unrest appear to have had an effect on business.'
The Independent
20-05-2025
- Business
- The Independent
Monthly company insolvencies rise to highest level since last July
Business insolvencies rose in April to their highest level since July last year after firms faced fresh tax increases, according to official data. Registered company insolvencies in England and Wales grew by 3% to 2,053 in April compared with the previous month, the Insolvency Service revealed. It was, however, still down 5% against the same period last year. Insolvencies have been ticking higher in recent months as UK companies have raised concerns of uncertain economic conditions and an increased tax burden. Last month, businesses saw their labour costs particularly jump after the Labour Government increased National Insurance contributions and put up the national minimum wage. Creditors' voluntary liquidations, where owners or shareholders in a company choose to fold it, were the most common insolvency, with 1,544 for the month. There were also 379 compulsory liquidations, where the firm is forced to fold, representing the highest number for about five years. Analysts have suggested the rise has come as the taxman increasingly seeks to recover unpaid debts in order to help boost the state's finances. Tom Russell, president of R3, the UK's insolvency and restructuring trade body, said: 'creditors' voluntary liquidations remain the process companies most commonly enter into – and their consistently high numbers reflect the ongoing challenges, high costs and political and economic uncertainty businesses face – and the toll these are taking on their finances and their confidence in their ability to turn their situation around. 'Compulsory liquidations have also hit their highest level in more than five years as creditors chase down unpaid debts in an attempt to meet their own payment deadlines – led by the HMRC as the Government attempts to balance the national books.' Jo Hewitt, a senior managing director at FTI Consulting, said: 'Whilst corporate insolvency rates showed a slight increase of 3% compared to March 2025, it is too early to tell if businesses in England and Wales will be resilient to the recent market volatility and tariff uncertainty as the full impact on companies and their supply chains will take a while to play out. 'Although this month's interest rate cut may provide a welcome reprieve for over-leveraged borrowers, we anticipate that external headwinds, such the rise in employer's national insurance contributions and falling oil prices, together with the continued geopolitical uncertainty will drive financial distress in certain sectors over the coming months.' It came as separate figures showed that the number of people going financially insolvent in England and Wales jumped by 8% in April.
Yahoo
20-05-2025
- Business
- Yahoo
Monthly company insolvencies rise to highest level since last July
Business insolvencies rose in April to their highest level since July last year after firms faced fresh tax increases, according to official data. Registered company insolvencies in England and Wales grew by 3% to 2,053 in April compared with the previous month, the Insolvency Service revealed. It was, however, still down 5% against the same period last year. Insolvencies have been ticking higher in recent months as UK companies have raised concerns of uncertain economic conditions and an increased tax burden. Last month, businesses saw their labour costs particularly jump after the Labour Government increased National Insurance contributions and put up the national minimum wage. Creditors' voluntary liquidations, where owners or shareholders in a company choose to fold it, were the most common insolvency, with 1,544 for the month. There were also 379 compulsory liquidations, where the firm is forced to fold, representing the highest number for about five years. Analysts have suggested the rise has come as the taxman increasingly seeks to recover unpaid debts in order to help boost the state's finances. Tom Russell, president of R3, the UK's insolvency and restructuring trade body, said: 'creditors' voluntary liquidations remain the process companies most commonly enter into – and their consistently high numbers reflect the ongoing challenges, high costs and political and economic uncertainty businesses face – and the toll these are taking on their finances and their confidence in their ability to turn their situation around. 'Compulsory liquidations have also hit their highest level in more than five years as creditors chase down unpaid debts in an attempt to meet their own payment deadlines – led by the HMRC as the Government attempts to balance the national books.' Jo Hewitt, a senior managing director at FTI Consulting, said: 'Whilst corporate insolvency rates showed a slight increase of 3% compared to March 2025, it is too early to tell if businesses in England and Wales will be resilient to the recent market volatility and tariff uncertainty as the full impact on companies and their supply chains will take a while to play out. 'Although this month's interest rate cut may provide a welcome reprieve for over-leveraged borrowers, we anticipate that external headwinds, such the rise in employer's national insurance contributions and falling oil prices, together with the continued geopolitical uncertainty will drive financial distress in certain sectors over the coming months.' It came as separate figures showed that the number of people going financially insolvent in England and Wales jumped by 8% in April. Sign in to access your portfolio
