6 February 2017: The Insolvency Service has now published its latest statistics for the fourth quarter of 2016, revealing that the total number of company insolvencies was higher in 2016 than the previous year. However, this was largely due to 1,796 connected personal service companies (PSCs) entering liquidation on the same date, following changes to claimable expenses rules. Excluding these PSCs, a total of 14,706 companies entered insolvency in 2016, a rise of just 0.3% on 2015. The reality is, therefore, that corporate insolvencies increased, but only very slightly.
At BRI we give the right advice first time, regardless of fee outcome for ourselves, which often means helping companies to explore alternative options which will avoid formal insolvency procedures entirely. Given that the office holder’s fees are usually payable before any creditors, a formal insolvency procedure will rarely be the best option for creditors, as long as non-formal insolvency options are still available to the company.
Over the last 12 months, the Milton Keynes office has assisted a number of companies to negotiate settlement agreements with creditors, most notably HM Revenue and Customs (HMRC). In each case of a successful negotiation, the directors had sought help at an early stage and there was a viable business which could demonstrate that with creditor support, it could trade successfully in the future.
The effect of successful negotiations for these companies cannot be overstated. The livelihoods of directors and employees are retained, the company’s asset values are preserved and the knock on effect of a formal insolvency procedure on suppliers is avoided completely.
We pride ourselves in knowing that we have contributed to the overall corporate insolvency figures remaining low and we look forward to helping even more companies out of financial difficulty in 2017.
Please let us know if you or your client would like to speak to one of our experienced team of insolvency practitioners on a no obligation basis. If we can help you to avoid a formal insolvency procedure – we will.