13 May 2016: They say that no news is good news; and that just about sums up the insolvency statistics for the Q1 (January to March 2016) period.
Corporate insolvencies are up a little on the previous quarter, but down compared to the previous years’ Q1 – largely driven by a rise in compulsory liquidations (not, in the main, the domain of insolvency practitioners). Likewise the number of personal insolvencies rose slightly against the previous quarter but not against the same quarter of the previous year. In this case a change in the eligibility criteria for debt relief orders (again not something for insolvency practitioners) appearing to be the reason.
Whilst that was the position for the insolvent-case appointments, the announcement in December 2015 of changes to the treatment of Entrepreneurs Reliefs, introduced from early April, caused a spike in solvent liquidations (Members Voluntary Liquidations – “MVL”s) which had many firms, including BRI, receiving enquiries up to the cut-off deadline of 5 April.
Apart from the significant spike in MVL the overall trend is continuing a 5 year downward path. A number of people are surprised that this is the case and would have expected, especially with stories of BHS and Austin Reed hitting the headlines, that all insolvency practitioners are exceptionally busy. Low interest rates, a generally helpful HMRC (providing you go to them, not if you wait for them to come to you) and banks who seem to be less willing to “pull the rug”, many having been given lifelines during the financial crisis themselves.
If you, your business or company have a financial problem then it doesn’t matter to you what the statistics say – you have a problem and it either quickly becomes all-absorbing or something you push to the back of your mind as you try to bury your head in the sand. Ignoring financial stumbling blocks rarely makes them go away or get smaller/better – penal interest rates and costs will see to it that things go from bad to worse. Grasping the nettle/biting the bullet and seeking a solution, rather than just lamenting the problem, are generally what is required.
This is where early input from an IP who is looking to give the best advice for you, rather than just secure another appointment for themselves, is what is required. BRI have a well proven record of doing what is best for the people they are helping rather than just securing another fee for ourselves. The earlier advice is sought the more likely it is that our services, in any formal capacity, will not be required.