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“Wake-up call” for local firms as insolvencies surge to six year high

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Corporate insolvencies rose by 7 per cent last year to reach a six year high and are a “wake-up call” for local businesses, according to the Eastern branch of insolvency and restructuring trade body R3. It is urging business owners to seek professional help if they are struggling as Insolvency Service figures show that there were 17,196 corporate insolvencies in 2019 in England & Wales, the highest since 2013. The numbers of administrations, which are designed to support business restructure and rescue, increased by 24 per cent in 2019 and are also at their highest since 2013. R3 Eastern chair Mark Upton (right), a partner at Ensors Chartered Accountants in East Anglia, said: “These figures are a reflection of anaemic economic growth throughout 2019… The manufacturing and construction sectors continue to struggle, while traditional retailers have been hit by declining footfall and the continued growth of online shopping. Brexit-inspired stockpiling in 2019 may also have added to economic disruption.”

He continued: “This will be a key year for East of England businesses, and the insolvency profession will do its best to support them. However, it is vital to have the full backing of the Government as well.” One factor which may affect involvency numbers in 2020 is the Government’s plan to make HMRC a ‘preferential creditor’ in insolvencies from April which will hurt business lending and could push some businesses into insolvency.

Last Updated ( Tuesday, 11 February 2020 09:07 )