Despite a slight reduction in the number of monthly corporate insolvency cases in April, it was the third consecutive month when the total was over 100.
In Scotland last month there were 101 company insolvencies. This was a 7% decrease on the total from a year ago and 17 fewer cases recorded than a month previously. March was the joint highest monthly total in the previous 12 months.
April’s total was made up of 47 CVLs (down from 55); 51 compulsory liquidations (down from 57) and three administrations (down from six). There were no CVAs or receivership appointments recorded.
Scotland’s insolvency regime is partly devolved.
The Accountant in Bankruptcy (AiB), Scotland’s insolvency service, administers the Register of Insolvencies which is a publicly accessible statutory register regarding the insolvency of individuals and businesses in Scotland including company liquidations and receiverships.
Between June 26th 2020 and April 30th 2025, there were three restructuring plans and one moratorium in Scotland. Both of these procedures were created by the Corporate Insolvency and Governance Act 2020.
Traditionally Scotland has seen more compulsory liquidations than any other kind of insolvency process but CVLs overtook them in April 2020 and had remained higher ever since until this month – the first month the positions had reverted.
Many Scottish directors and their accountants are continuing to take difficult decisions early enough to give them control of key elements of an insolvency process.
Many creditors are beginning to take action and force the closure of their creditors to force sales of their assets to recoup arrears.
The company insolvency rate in Scotland in the 12 months to April 2025 was 51.2 per 10,000 companies on the effective register. This was down by 1.5 from the preceding 12 months ending April 2024.
The total number of company insolvencies for the whole of the UK in April 2025 was 2,184 – a monthly increase of 45.
Tom Russell, Vice President of R3, the UK’s insolvency and restructuring trade body said: “April’s corporate insolvency figures were the highest we have seen since July 2024.
“Creditors’ Voluntary Liquidations remain the process companies most commonly enter into – and their consistently high numbers reflect the ongoing challenges, high costs and political and economic uncertainty businesses face – and the toll these are taking on their finances and their confidence in their ability to turn their situation around.
“Compulsory liquidations have also hit the highest level in more than five years as creditors chase down unpaid debts in an attempt to meet their own payment deadlines – led by the HMRC as the Government attempts to balance the national books.
“Increasing costs and uncertainty are continuing to drive corporate insolvencies. April saw the introduction of the new rates for Employers’ National Insurance Contributions and Minimum Wage, which have increased overheads for businesses at an already challenging time.
“Many businesses will already have increased prices and cut expenditure to cope with the existing economic challenges and many, especially SMEs, will find it increasingly difficult to respond to further cost increases.
“It is unlikely that we will see the full impact this will have on businesses until later in the year, but the prospect of these changes being introduced has influenced a number of directors’ decisions to seek insolvency and restructuring advice and consider the future of their businesses.
“The recent increase in unemployment indicates that the tax increases along with the prospect of the Employment Rights Bill coming into law, has also affected hiring levels and investment as management teams wait to see how it will affect their wage bills and we expect this to continue until the picture is clearer.
“Alongside this, businesses have faced the impact of the introduction of the US tariffs. While some of the outcomes from the President and Prime Minister’s recent announcement will be a relief to businesses in a range of sectors, a number of the details of the tariffs still need to be confirmed, and there is no denying their introduction will make it more expensive to export to America.
“The uncertainty and unpredictability around US tariff policy generally is also likely to affect costs, growth and investment as both business owners and lenders will look at how the tariffs will affect revenue and profits and may choose to change their plans, review or withdraw their funding once these have been considered.
“Looking across the economy, the sectoral picture is a mixed one.
“Construction continues to be affected by ongoing issues with the price of materials, payment and client hesitancy about commissioning new work, while the care sector is trying to navigate how it will manage the Government’s proposals to end overseas recruitment for social care visas.
“On a more positive note, retailers have benefited from the late Easter and improved weather, which has led to an increase in sales and hospitality has also seen a rise in activity and spending levels. However, there is no escaping the fact that all of these sectors will be seriously affected by the changes to National Insurance and Minimum Wage, which will put a further squeeze on margins and increase costs and could lead to more businesses becoming financially distressed.
No matter what situation your business faces – you could still have various options available to you.
Get in touch with us right now to arrange a free initial consultation to discuss the available strategies that you can begin to implement for your business straight away.
No matter what aims and objectives you have for 2025, the sooner you get some impartial, practical advice and ideas, the sooner you can act on them to protect and strengthen your business so you can do everything you can to survive and thrive.