Companies Still Sheltering from the worst of the Covid-19 Economic Impact
The Insolvency Service has published the latest figures for formal corporate insolvencies for February 2021 which indicates business insolvencies fell by 9% to 686 in February 2021 compared to January’s figure of 754, and were 49% lower than February 2020’s figure of 1,348.
These figures belie the ongoing problems faced by many businesses which are masked by the extended Government support packages and the protection in place against aggressive debt recovery and repossessions.
The insolvency and restructuring trade body R3 commented “The fall in corporate insolvency numbers shown in the figures published today has been driven by a reduction in all corporate insolvency processes.”.
“Government support has been and continues to be a lifeline for many – and has stemmed rather than stopped the flow of insolvencies we would expect to see in this kind of economic climate.”
“In addition, the usual ‘trigger points’ for action, such as winding-up petitions or repossession notices, are out of the picture at the moment, and our members say many company directors are putting off examining their options as a result.”
Pressure must surely be mounting on businesses with a growing debt legacy accumulated during the pandemic as the withdrawal of the support and protection packages starts to loom. The second half of 2021 will bring further and perhaps even greater challenges to businesses as the economy starts the long journey ahead back to a state of “normal”.
Our team at Poppleton & Appleby is on hand to support you and your clients in these specialist areas. Should you wish to discuss any client matters or simply chat around the issues we have raised here, feel free to contact Andy, Matt or any of the team at Poppleton & Appleby.