Corporate insolvency figures fall

The number of businesses going bust dropped.

The number of businesses going bust dropped.

The rate of businesses going bust dropped between July and September.

Corporate insolvencies were down 4.7 per cent compared to the previous quarter with 4,716 compulsory liquidations, reports the Insolvency Service.

However, the number of businesses going into liquidation in the third quarter was 14.6 per cent higher than in the same period a year ago.

Carl Jackson, national head of business consultancy Tenon Recovery, says: ‘Low interest rates, the temporary reduction in VAT, low inflation and HMRC’s Time to Pay Scheme have given firms some breathing room, but there is a feeling that these initiatives are simply delaying inevitable failure. Once withdrawn, there will be a flurry of failures.’

According to Tenon, the total number of business failures so far this year has already exceeded the figure from the whole of 2008 by 28.8 per cent. The firm estimates 5,000 more businesses will go into liquidation during November and December.

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