The data shows that a total of 4,052 companies entered into formal insolvency in Q1 2015, which was 1.3% less than Q4 2014 and 11.3% lower than Q1 2014. The number of creditor’s voluntary liquidations also continues to fall and is now at the lowest level since Q2 2008.

Compulsory liquidations increased for the first time since the beginning of 2014. A total of 904 companies were subject to a compulsory winding-up order in Q1 2015, a 9.3% increase on the last quarter but 15.9% lower than Q1 2014. Receiverships and company voluntary arrangements both declined to their lowest level since Q4 2007.

The liquidation rate in the 12 months ending Q1 2015 was 0.5% of active companies, the lowest level since Q4 1984, the earliest period the Insolvency Service says it is possible to calculate the rate.

There were a total of 20,826 individual insolvencies in Q1 2015, 8.7% lower than Q4 2014 and a decrease of 18.6% compared to Q1 2014. This was the third successive quarter of decline, to the lowest level since Q4 2005.

Bankruptcy rates continued the long term downward trend from 2009, with a total of 4,209 bankruptcy orders in Q1 2015, 6.6% lower than Q4 2014 and 22.5% lower than Q1 2014. Levels of debt relief orders (DROs) and individual voluntary arrangements (IVAs) also continued to fall. Overall, in the 12 months ending Q1 2015, 1 in 478 adults (just over 0.2% of the adult population) became insolvent. This was the lowest rate since the 12 months ending Q1 2006.

Graham Bushby, Baker Tilly’s national head of restructuring and recovery, said the latest figures ‘present a positive picture of corporate financial health’ but warned ‘the statistics don’t really tell the whole story’.

Bushby said many companies are still experiencing significant financial distress and predicted insolvency levels could start rising again within the next one to two years.

‘We have seen a trend for the banks to sell off their non-core bad debt books to private equity groups. As these groups work through those debt books, they are prioritising those firms that they can realise assets from first. However, as they start to focus on the more distressed companies in the portfolios, they may then be left with little choice but to enter them into some kind of insolvency procedure.

‘We are also seeing a significant number of companies servicing their debts on an interest only basis. By doing this many of them are avoiding entering into insolvency procedures, but they are also failing to pay off any capital. If we see a rise in interest rates and inflationary pressures beginning to emerge, this could leave many companies in a vulnerable position.’ Bushby cautioned.

Carl Bowles, a partner and insolvency practitioner with accountancy firm, Carter Backer Winter said: ‘I'm surprised by the significant decrease in company insolvencies in the first quarter of this year compared to the first quarter of 2014.

'A reduction in the number of corporate insolvencies by over 11% year on year is notable and important. Even more so is that company liquidations are at their lowest level since records began in 1984. It means that corporate insolvencies in England and Wales are on an increasingly downward trend.

‘There has been no crisis or key event that has led to such a marked reduction in insolvencies year on year.’