Accredited official statistics

Commentary - Company Insolvency Statistics July to September 2023

Published 31 October 2023

Released

31 October 2023

Next release

30 January 2024

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Statistical enquiries

David Webster (responsible statistician)

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1. Main messages for England and Wales

• Between 1 July and 30 September 2023 (Q3 2023), there were 6,208 (seasonally adjusted) registered company insolvencies, as shown in Figure 1, comprising 4,965 creditors’ voluntary liquidations (CVLs), 735 compulsory liquidations, 466 administrations, 41 company voluntary arrangements (CVAs) and one receivership appointment.

• After seasonal adjustment, the number of company insolvencies in Q3 2023 was 2% lower than in Q2 2023, but 10% higher than in Q3 2022. The last two quarters saw the highest quarterly insolvency numbers since Q2 2009 and the highest numbers of CVLs since the start of the series in 1960. The numbers of compulsory liquidations and administrations increased to levels last seen before the coronavirus (COVID-19) pandemic.

• One in 191 active companies (at a rate of 52.4 per 10,000 active companies) entered insolvent liquidation between 1 October 2022 and 30 September 2023. This was an increase from the 46.9 per 10,000 active companies that entered liquidation in the 12 months ending 30 September 2022.

Figure 1: Company insolvencies in Q2 and Q3 2023 were at the highest level since Q2 2009.

England and Wales, Q3 2003 to Q3 2023, seasonally adjusted

Sources: Insolvency Service (compulsory liquidations only); Companies House (all other insolvency procedures)

Single-quarter peaks in ‘Other insolvencies’ in Q4 2006 and Q3 2008 are due to large numbers of connected managed service companies entering administration on the same day in these quarters.

The long-term series back to Q1 1984 (where applicable) can be found in the CSV file that accompanies this release. Record level data back to Q1 2012 (where available) can also be found in a separate CSV file published alongside this release.

From the start of the coronavirus (COVID-19) pandemic until mid-2021, numbers of company insolvencies were low when compared with pre-pandemic levels. This is likely to have been driven in part by Government fiscal and other measures that were put in place to support businesses and individuals during the pandemic.

2. Things you need to know about this release

This statistics release contains the latest data on company insolvency in the UK, presenting the numbers of companies which have entered a formal insolvency procedure after being unable to pay their debts. Information is presented separately for England and Wales, Scotland and Northern Ireland.

The Insolvency Service separately publishes monthly statistics to provide more up to date information on the numbers of company and individual insolvencies during this time of economic uncertainty. However, they have not replaced the quarterly National Statistics, since the information presented on a monthly basis is less granular and is less reliable for monitoring changes in trends over time. Note that the monthly statistics on company insolvencies may not be consistent with data presented within this statistical release. Following a consultation in 2023, the Insolvency Service will merge the monthly and quarterly statistics with the first release in the new format being published in April 2024, while maintaining monthly frequency.

Underlying data for these quarterly statistics for England and Wales were adjusted where there was evidence of seasonality, to account for variation in company insolvencies across the year and allow for comparison to the most recent period within years. Data for Scotland and Northern Ireland were not adjusted. The seasonal adjustment models are typically reviewed on an annual basis. In accordance with the outcome of the April 2023 Seasonal Adjustment Review, CVLs and administrations were seasonally adjusted.

Quarters referred to in this publication are calendar year quarters, such that Q3 2023 is the period from 1 July to 30 September 2023.

2.1 Designation as National Statistics

These accredited official statistics were independently reviewed by the Office for Statistics Regulation in July 2019. They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics.

Our statistical practice is regulated by the Office for Statistics Regulation (OSR).

OSR sets the standards of trustworthiness, quality and value in the Code of Practice for Statistics that all producers of official statistics should adhere to.

You are welcome to contact us directly with any comments about how we meet these standards.

Alternatively, you can contact OSR by emailing regulation@statistics.gov.uk or via the OSR website.

3. Company insolvency in England and Wales

3.1 Numbers of company insolvencies

After seasonal adjustment (where applicable), there were 6,208 company insolvencies registered in Q3 2023, 10% higher than during the same quarter in the previous year, but 2% lower than in the previous quarter (Q2 2023).

Creditors’ voluntary liquidations (CVLs) were the most common company insolvency procedure (80% of cases), followed by compulsory liquidations (12% of cases), administrations (8% of cases) and company voluntary arrangements (CVAs; 1% of cases). There was one receivership appointment, these are now rare (see glossary for further details).

A summary of company insolvencies since Q3 2022 can be found in Table 1 below. The long-term series prior to Q3 2022 can be found in the Excel and CSV files that accompany this release.

Unlike the monthly statistics, quarterly statistics are seasonally adjusted to account for seasonal variation in insolvencies across the year and allow for comparison to the most recent period within years.

Table 1: The numbers of registered company insolvencies in Q2 and Q3 2023 were the highest since Q2 2009

England and Wales, Q3 2022 to Q3 2023, seasonally adjusted

	Total company insolvencies	Compulsory liquidations	CVLs	Administrations	CVAs	Receiverships
2022Q3	5,635	504	4,807	295	29	0
2022Q4	5,979	732	4,878	344	25	0
2023Q1	5,820	668	4,799	315	38	0
2023Q2	6,319	645	5,197	421	56	0
2023Q3	6,208	735	4,965	466	41	1
Percentage change, latest quarter (Q3 2023) compared with:
vs 2023Q2	-2%	14%	-4%	11%	-27%	[z]
vs 2022Q3	10%	46%	3%	58%	41%	[z]

Sources: Insolvency Service (compulsory liquidations only); Companies House (all other insolvency procedures)

[z] indicates percentage changes are not applicable as these have not been calculated where both numbers are less than five.

CVLs

In Q3 2023, CVLs accounted for 80% of all company insolvencies. The number of CVLs decreased by 4% from Q2 2023 but was 3% higher than during the same quarter last year, after seasonal adjustment. The numbers of CVLs in Q2 and Q3 2023 were the highest in the time series going back to 1960.

Compulsory liquidations

The number of compulsory liquidations in Q3 2023 was 14% higher than in the previous quarter and 46% higher than in Q3 2022. Numbers have increased from record low levels seen while restrictions applied to the use of statutory demands and certain winding-up petitions (leading to compulsory liquidations). These temporary measures ended on 31 March 2022. The number of compulsory liquidations in Q3 2023 was similar to pre-pandemic levels.

Administrations

The number of administrations in Q3 2023 was 11% higher than in Q2 2023, and 58% higher than in Q3 2022, after seasonal adjustment.

Unlike other insolvency types, there was not a large decline in numbers of administrations at the start of the pandemic (Q2 2020). However, the number of administrations dropped in 2021 to the lowest annual level since 2003, before increasing in 2022 and so far in 2023. The number of administrations in Q3 2023 was similar to pre-pandemic levels.

CVAs

The number of CVAs was 27% lower than in Q3 2023 than in Q2 2023, but 41% higher than Q3 2022. CVA numbers remain low compared to historical levels.

Receivership appointments

There was one receivership appointment in Q3 2023.

Moratoriums and restructuring plans

Between 26 June 2020 and 30 September 2023, 46 companies obtained a moratorium and 22 companies had a restructuring plan registered at Companies House. These two procedures were created by the Corporate Insolvency and Governance Act 2020.

3.2 Liquidation rates per 10,000 active companies

In the four quarters ending Q3 2023, the company liquidation rate was 52.4 per 10,000 active companies in England and Wales (Table 2 and Figure 2 below). This corresponds to 1 in 191 companies entering liquidation in the 12 months ending 30 September 2023.

Insolvency rates are calculated as a proportion of the total number of active companies and are more comparable over longer time periods than the absolute numbers.

The rates presented for each quarter reflect a four-quarter rolling rate per 10,000 active companies. Therefore, the Q3 2023 rates, for example, were calculated using data covering the period Q4 2022 to Q3 2023.

Table 2: The rate of company liquidations in the 12 months ending Q3 2023 was higher than in the 12-month periods ending Q2 2023 and Q3 2022

England and Wales, four-quarter rolling rate per 10,000 active companies

	Total liquidations	Compulsory Liquidations	CVLs	CVL following Administration
2022Q3	46.9	3.3	43.0	0.7
2022Q4	49.6	4.6	44.3	0.6
2023Q1	50.8	5.3	44.9	0.6
2023Q2	52.1	5.9	45.6	0.5
2023Q3	52.4	6.4	45.5	0.5
Change in rate per 10,000 active companies, 12 months ending latest quarter (Q3 2023) compared with:
vs 2023Q2	0.4	0.5	-0.1	0.0
vs 2022Q3	5.5	3.1	2.6	-0.2

Source: Insolvency Service (compulsory liquidations only); Companies House (all other insolvency procedures)

Changes in rate numbers may not equal the difference in rates presented due to rounding.

The long-term series back to Q1 1984 (where applicable) can be found in the CSV file that accompanies this release.

The rate of company insolvencies in the 12 months ending Q3 2023 was higher than in the 12-month periods ending Q2 2023 and Q3 2022.

In the four quarters ending Q3 2023:

• The rate of compulsory liquidation increased by 0.5 per 10,000 active companies from Q2 2023, and was 3.1 higher than the period ending Q3 2022;
• the rate of CVLs fell by 0.1 from Q2 2023, but rose by 2.6 from Q3 2022; and
• the rate of CVLs after administration was similar to Q2 2023 and 0.2 lower than in Q3 2022. Note that CVLs following administration are not new insolvency procedures, and are counted as administrations in Table 1.

Figure 2: The liquidation rate in the 12 months ending Q3 2023 was higher than pre-pandemic levels, driven by a higher rate of CVLs.

England and Wales, Q3 2013 to Q3 2023, four-quarter rolling rate per 10,000 active companies

Sources: Insolvency Service (compulsory liquidations only); Companies House (all other insolvency procedures)

While insolvency numbers between Q4 2022 and Q3 2023 were higher than ten years before, the rate of insolvency per 10,000 companies was lower, because the number of companies on the Companies House register has increased during this time. More information on the size of the Companies House register is available in Companies House Official Statistics publications.

3.3 Company insolvencies by industry (SIC 2007)

The following analysis excludes insolvencies where the company industry was unknown, non-trading or dormant (389 in the four quarters ending Q3 2023, compared to 216 in the four quarters ending Q3 2022). In some cases, confirmation of industry sector for compulsory liquidations may be delayed by one quarter or more and therefore insolvency numbers by industry are provisional.

Note that the numbers of insolvencies in these categories are likely to be partly driven by the number of active companies in a given category and do not reflect the relative likelihood of companies in each industry entering insolvency.

The five industries (in accordance with SIC 2007) that experienced the highest number of insolvencies in the 12 months ending Q3 2023 were:

• Construction (4,276, 18% of cases with industry captured);

• Wholesale & retail trade; repair of motor vehicles & motorcycles (3,777, 16% of cases with industry captured);

• Accommodation & food service activities (3,477, 14% of cases with industry captured);

• Administrative & support service activities (2,282, 9% of cases with industry captured); and

• Manufacturing (1,911, 8% of cases with industry captured);

Higher insolvencies in the 12 months ending Q3 2022 have been driven primarily by increases in the Accommodation & food service, Wholesale & retail trade and Manufacturing sectors, whereas the Construction and Administrative & support service sectors have shown a much smaller increase.

Figure 3: In the past 12 months, insolvencies have risen fastest in the Accommodation & food service and Wholesale & retail trade sectors.

Number of insolvencies in the top five sectors (between Q4 2022 and Q3 2023), England and Wales, Q1 2013 to Q3 2023, not seasonally adjusted

Sources: Insolvency Service (compulsory liquidations only); Companies House (all other insolvency procedures)

All industries except Electricity, gas, steam & air conditioning supply and Mining & quarrying saw increased insolvency numbers in the 12 months ending Q3 2023 compared to the period ending Q3 2022, as shown in Figure 4. For the larger sectors (those accounting for at least 5% of insolvencies), increases ranged from 4% in Professional, scientific & technical activities to 48% in Accommodation & food service activities.

Figure 4: All large industries saw increased insolvencies in the four quarters ending Q3 2023 compared to the period ending Q3 2022

England and Wales, Q4 2021 to Q3 2023

Sources: Insolvency Service (compulsory liquidations only); Companies House (all other insolvency procedures)

4. Company insolvency in Scotland

Legislation relating to company insolvency in Scotland is devolved. The Accountant in Bankruptcy, Scotland’s Insolvency Service, administers company insolvency in Scotland. The figures below are not seasonally adjusted.

In Q3 2023, there were 296 total company insolvencies in Scotland, 7% higher than in the same quarter of 2022. These comprised 107 compulsory liquidations, 174 CVLs and15 administrations. There were no CVAs or receivership appointments. These numbers are shown in Figure 5.

Figure 5: Company insolvencies were higher in Q3 2023 than in the same quarter last year, and were also higher than pre-pandemic levels

Scotland, Q3 2013 to Q3 2023, not seasonally adjusted

Source: Companies House

Historically, the volume of company insolvencies registered in Scotland has been driven by compulsory liquidations. However, during the coronavirus pandemic, around three times as many CVLs as compulsory liquidations were registered. In the first nine months of 2023, CVL numbers remained more than 1.5 times higher than compulsory liquidation numbers.

Between 26 June 2020 and 30 September 2023, in Scotland, no moratoriums were obtained and two companies had a restructuring plan registered at Companies House. These two procedures were created by the Corporate Insolvency and Governance Act 2020.

The total liquidation rate in Scotland for the 12 months ending Q3 2023 was 51.7 per 10,000 active companies, as shown in Figure 5. This was up by 7.7 from the 12 months ending Q3 2022.

Figure 6: The liquidation rate in Scotland increased in the 12 months ending Q3 2023 compared to the 12 months ending Q3 2022

Scotland, Q3 2013 to Q3 2023, four-quarter rolling rate per 10,000 active companies

Source: Companies House

5. Company insolvency in Northern Ireland

Company insolvency in Northern Ireland is governed by separate, but broadly similar, legislation to England and Wales, and so figures are presented separately.

There were 62 company insolvencies in Northern Ireland in Q3 2023, an increase of 24% from the same quarter of 2022. This comprised 30 compulsory liquidations, 23 CVLs, eight CVAs and one administration. There were no administrative receiverships. These numbers can be seen in Figure 7.

Figure 7: Company insolvencies in Northern Ireland remained lower than pre-pandemic levels

Northern Ireland, Q3 2013 to Q3 2023, not seasonally adjusted

Sources: Department for the Economy, Northern Ireland (compulsory liquidations only); Companies House (all other insolvency procedures)

The total liquidation rate in the 12 months ending Q3 2023 in Northern Ireland was 22.4 per 10,000 active companies, as shown in Figure 8. This is a decrease of 2.7 from the 12 months ending Q3 2022.

Figure 8: Liquidation rates in Northern Ireland were lower in the 12 months ending Q3 2023 than in the 12 months ending Q3 2022

Northern Ireland, Q3 2013 to Q3 2023, four-quarter rolling rate per 10,000 active companies

Sources: Department for the Economy, Northern Ireland (compulsory liquidations only); Companies House (all other insolvency procedures)

6. Data and Methodology

6.1 Data Sources

Company insolvency data were sourced from Companies House, except for compulsory liquidation data for England and Wales which were sourced from the Insolvency Service, and compulsory liquidation data for Northern Ireland which were sourced from the Department for the Economy.

Companies House data were used to determine all active companies registered in each quarter in the previous twelve months, to calculate insolvency rates for England and Wales. These data are separately published by Companies House on the Gov.uk website.

More information on the administrative systems used to compile insolvency statistics can be found in the Quarterly Statistics Methodology and Quality document.

6.2 Methodology and data quality

Seasonal adjustment

To aid comparison between quarters, underlying data for CVLs and administrations in England and Wales were adjusted where there was evidence of seasonality to minimise the effect of the time of year and provide a true picture of the trends in insolvency. There was no evidence of seasonality in the underlying data on compulsory liquidations, CVAs and receiverships, therefore these data have not been adjusted. Full details on the models used to adjust the data can be found in the Seasonal Adjustment Review published in April 2023.

The data series for Scotland and Northern Ireland do not demonstrate consistent seasonality and only the unadjusted series have been presented, as agreed with the relevant officials in the devolved administrations.

Rates of insolvency

Insolvency rates were calculated for England and Wales, Scotland and Northern Ireland. The total number of companies entering insolvency in each location during the previous twelve months was divided by the mean average number of all active companies registered with Companies House in that location in the same twelve-month period.

6.3 Revisions

These statistics are subject to scheduled revisions, as set out in the published Revisions Policy. Other revisions tend to be made as a result of data being entered onto administrative systems after the cut-off date for data being extracted to produce the statistics. Any revisions to these statistics will be marked with an ‘[r]’ in the relevant table.

Further details on routine and non-routine revisions can be found in the accompanying Quarterly Statistics Methodology and Quality document.

7. Glossary

Key Terms used within this statistical bulletin

Term	Definition
Administration	The objective of administration is the rescue of the company as a going concern, or if this is not possible then to obtain a better result for creditors than would be likely if the company were to be wound up. A licensed insolvency practitioner, ‘the administrator’, is appointed to manage a company’s affairs, business and property for the benefit of the creditors.
Bulk Creditors’ voluntary liquidation	IR35 rules are intended to prevent the avoidance of tax and National Insurance contributions using personal service companies and partnerships. Between April 2016 and early 2019, following changes to the IR35 rules and/or changes in VAT flat rate, some directors of personal service companies had cited these changes as the primary reason that their company’s activities had become unviable, therefore leading to creditors’ voluntary liquidation (CVL) of large numbers of these companies. These additional CVLs are referred to as “bulk insolvencies”.
Company voluntary arrangement (CVA)	CVAs are another mechanism for business rescue. They are a voluntary means of repaying creditors some or all of what they are owed. Once approved by 75% or more of creditors, the arrangement is binding on all creditors. CVAs are supervised by licensed insolvency practitioners.
Compulsory liquidation	A winding-up order obtained from the court by a creditor, shareholder or director. See Liquidation for details on the process.
Creditors’ voluntary liquidation (CVL)	Shareholders of a company can themselves pass a resolution that the company be wound up voluntarily. See Liquidation for details on the process. Administrations which result in a Creditors’ Voluntary Liquidation are recorded separately by Companies House and are excluded from CVL figures as they do not represent a new company entering into an insolvency procedure for the first time. These cases are only ever recorded as Administrations.
Liquidation	Liquidation is a legal process in which a liquidator is appointed to ‘wind up’ the affairs of a limited company. The purpose of liquidation is to sell the company’s assets and distribute the proceeds to its creditors. At the end of the process, the company is dissolved – it ceases to exist. Statistics on compulsory liquidations and creditors’ voluntary liquidations are presented in these statistics. A third type of winding up, members’ voluntary liquidation is not included because it does not involve insolvency.
Moratorium	Moratoriums were introduced under the Corporate Insolvency and Governance Act 2020 to give struggling businesses formal breathing space in which to explore rescue and restructuring options, free from creditor or other legal action. Except in certain circumstances, no insolvency proceedings can be instigated against the company during the moratorium period. It also prevents legal action being taken against a company without permission from the court.
Partnership Winding-up Orders	This is similar to the liquidation of a company. When the partners have decided that the partnership has no viable future or purpose then a decision may be made to cease trading and wind up the partnership. There are two basic ways that the partnership can be wound up: the creditors petition and a partner’s petition.
Receivership Appointments	Administrative receivership is where a creditor with a floating charge (often a bank) appoints a licensed insolvency practitioner to recover the money it is owed. Before 2000 receivership appointments also included other, non-insolvency, procedures, for example under the Law of Property Act 1925. The use of this procedure is restricted to certain types of company, or to floating charges, created before September 2003.
Restructuring Plan	New restructuring measures were introduced under the Corporate Insolvency and Governance Act 2020 to support viable companies struggling with unmanageable debt obligations to restructure under a new procedure. They allow the court to sanction a plan that binds creditors to a restructuring plan if it is fair and equitable. Creditors vote on the plan, but the court can impose it on dissenting classes of creditors (‘cram down’) provided that the necessary conditions are met.
Standard Industrial Classification (SIC 2007)	Used in classifying business establishments and other statistical units by the type of economic activity in which they are engaged. Further information can be found on the ONS website