The increase in company liquidations is also due to an 8.2% rise in creditors’ voluntary liquidations (CVL).

In 2017 bulk insolvencies, large numbers of connected companies entering insolvency following changes to claimable expense rules, accounted for an estimated 2,131 of the total 17,243 company insolvencies. This compares to 2016 where there were 16,502 companies that entered insolvency.

Excluding bulk insolvencies, 15,112 companies entered insolvency in 2017, a rise of 2.5% on 2016. This was driven by a 6.3% rise in the underlying number of CVLs.

Administrations in 2017 fell by 6.2%, compulsory liquidations fell by 4.5% and company voluntary arrangements by 15.6%.

Of the 17,243 companies that entered insolvency in 2017, there were 12,861 creditor voluntary liquidations (74.6% of total insolvencies), 2,799 compulsory liquidations (16.2%), 1,289 administrations (7.5%), 292 company voluntary arrangements (1.7%) and two receiverships (less than 0.1%).

The estimated liquidation rate in 2017 was 0.47% of active companies, the same level as 2016.

Brian Johnson, insolvency partner at HW Fisher & Company, said: ‘Even stripping out the distorting effects of the two spikes triggered by law changes, the overall trend is up, with the number of companies going to the wall rising steadily throughout 2017.

‘While November’s interest rate rise will turn the screws on struggling companies, its full impact has yet to be fully felt.’

‘Two sectors in particular are on high alert – retail and construction. Many high street brands suffered a poor Christmas amid lower levels of consumer spending and continued Brexit uncertainty, and the sharp slowdown in construction is putting extreme stress on building subcontractors – thousands of whom face taking a large hit following the collapse of Carillion.’

Insolvency Statistics – October to December 2017 is available here. 

Report by Amy Austin