South East outside London sees insolvencies increase steeply
Insolvency Index: company failures rise across UK as professional services suffer badly
I am outraged that HMRC has been able to take £4.5m of disputed VAT charges on a ‘guilty until proven innocent basis’
Steve Endacott, chief executive, On Holiday Group
Insolvencies in the South East of England are rising more sharply than across the UK as a whole, figures compiled by Exaro show.
The number of companies that were going through insolvency in the South East jumped 45 per cent to 389 in March compared with 269 for the same month last year. At the same time, the Exaro Insolvency Index shows an increase of nine per cent for the whole of the UK.
Companies that filed one or more insolvency notices in the whole UK last month rose to 2,692, up from 2,467 in March 2013. The number for last month is up slightly on February, which stood at 2,580.
The figures for the South East do not include London, which saw a small increase in the number of insolvencies in March on the year before, rising 1.4 per cent from 633 to 642.
The South East also suffered higher increases in insolvencies in the quarter to March compared with the same period last year, going from 744 to 937.
The region’s 26 per cent rise for the quarter to March comes against a backdrop of a 10 per cent increase for the UK. London had fewer insolvencies in the quarter than last year, dropping 6.5 per cent from 1,737 to 1,624.
Alex Cadwallader, a director of Leonard Curtis, a company that specialises in corporate recovery and insolvency, said: “As is often the case, the market generally sees an increase in the number of insolvencies as the economy improves.
“Many stakeholders, such as banks and other investors owed money, have a tendency to hold their position during a recession. But as confidence in the market increases, they become increasingly willing to force the issue with their under-performing clients or businesses.”
One of the larger companies that filed for insolvency in the South East in the period was On Holiday Group. The company, based in Crawley in West Sussex, entered administration in March along with its subsidiary, OHG Accommodation, putting around 65 jobs at risk.
On Holiday Group’s chief executive, Steve Endacott, blamed a dispute with HM Revenue & Customs (HMRC) over a VAT payment of £4.5 million for the company’s demise.
He said: “I am outraged that HMRC has been able to take £4.5m of disputed VAT charges on a ‘guilty-until-proven-innocent basis.’”
“We have been forced to take the decision to put the company into administration because of pressure from hoteliers to make payments, which we cannot do without the return of the £4.5m held by HMRC.”
In the South East, there were year-on-year rises in every type of insolvency in March and in the quarter to last month. The figures are shown in the top two graphs to the right, which can be clicked to enlarge.
The figures for the UK as a whole are shown in the next two graphs. One positive sign amid the rising insolvencies is the 19 per cent fall in the number of companies that went into administration or receivership in March compared with last year, decreasing from 230 to 186.
Northern Ireland suffered increases in every insolvency category in March, a worsening trend that was highlighted in January’s Exaro Insolvency Index. By contrast, Yorkshire and Humberside continued to see falls across most types of insolvencies.
The sector for “professional, scientific and technical activities” is being hit hard by company failures.
The number of companies in the sector that were going through insolvency increased 36 per cent in March to 335 compared with 246 for the same month last year. There was a rise of 19 per cent in the quarter to March, up to 825 from 693 in the same period in 2013. Within the sector, management consultancies saw increases in every insolvency type.
Information and communication companies also continue to suffer rising levels of insolvencies, a pattern that was also reflected in last month’s figures. The figures show that software companies are faring especially badly.
The Exaro Insolvency Index draws on insolvency notices as published in the London, Belfast and Edinburgh Gazettes, along with information from Companies House. In the source data, a small proportion of the insolvencies is not ascribed to a specific sector.
The Exaro Insolvency Index provides a detailed analysis of company failures in the UK. If you are interested in buying a regular, specialised bulletin that enables you to track the data – including lists of company failures – in specific sectors or geographical areas, please e-mail email@example.com, putting in the subject line: Exaro Insolvency Index.
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