British Gas has tripled the number of winding up petitions it has brought against businesses in the past year and looks set to issue even more in 2024.

A moratorium on winding up petitions was brought in during the pandemic in 2020 but this was lifted in 2021, allowing creditors to take more robust action against companies with arrears. 

Year Winding Up Petitions issued
2021 13
2022 38
2023 111
2024 (to date) 60

Centrica, the owner of British Gas, recorded an 82% increase in bad debts which reached a total of £541 million last year. The amount of bad debt owed by small businesses increased by £86 million during this period.

A statement from British Gas and Centrica said the rise in the numbers of winding up petitions was linked to the expiry of the temporary protection given to businesses during the pandemic.

“Our debt policy is fair with robust controls in place. We seek to engage early with business customers to discuss the support and options available and are able to offer extended payment plans where appropriate. 

“We do not treat winding-up petitions lightly and only consider them in specific circumstances where there is clear liability, the debt is not in dispute and all other efforts to resolve the matter directly with the customer have been unsuccessful. 

“Winding up petitions are a last resort.”

Tina McKenzie from the Federation of Small Business (FSB) wants the new government to give additional powers to the energy ombudsman to protect small businesses from being pursued by energy companies. 

She said: “Soaring electricity and gas prices have put immense pressure on small businesses and although costs have eased since their recent peak, the cumulative damage caused to the small business sector – and the ongoing strain caused by higher baseline bills – must not be underestimated.

“The eligibility criteria for the energy ombudsman should be expanded, so that more small firms are able to access its services.

Katie Nicholls, chief executive of UKHospitality, the industry trade body that has seen large rises in the gas and electricity bills among its members said: “Hospitality businesses saw their energy bills triple or even quadruple two years ago and were subject to unfair treatment by some suppliers, including refusal to offer contracts and failure to renegotiate contracts.

“It’s a shame that the extreme option of winding-up orders has been pursued, instead of energy companies thinking twice and offering alternatives to hospitality businesses facing financial difficulties related to high bills.”

This might become a familiar story during the rest of 2024 as more energy companies reveal how many winding up petitions they are bringing against small businesses. 

It also shows how seriously they are treating arrears and how seriously you should treat them if your business is behind on regular repayments and bills. 

If you’re worried about being able to juggle and manage your financial commitments, get in touch with us. 

Once our advisors get a clearer picture of your unique situation, they will be able to work through your viable options with you and let you know what you can do to improve your position in the short, medium and hopefully longer term.