Insolvencies at 16 year high19 Feb 2025 08:09
“COMPANY insolvencies have surged to a 16-year high as bosses give up ahead of Rachel Reeves’s tax raid, official figures show.
More businesses went under last month than in any January since the financial crisis. The number of corporate insolvencies jumped by 10.7pc year on year to hit 1,971, which means nearly 500 companies went bust every week.
The monthly total was up by 6.5pc compared with December and was the highest January total since 2009, when the economy was reeling from the credit crunch. Excluding 2009, last month’s insolvency total was the highest on record for any January since the Insolvency Service’s data began in 2000.
Tim Cooper, president of R3, the UK’s insolvency and restructuring trade body, said the rise was driven by bosses opting for voluntary liquidations. He said: “Directors may be choosing to close down their firms after years of challenging trading conditions and ahead of the increase in the national minimum wage and employers’ National Insurance contributions.”
It came as figures showed the number of people employed in hospitality fell by 58,000 between January 2024 and January 2025, according to payroll data. Over the same period, employment in retail, wholesale and car garages dropped by just over 36,000, the Office for National Statistics said. It represents a combined plunge of more than 94,000 in employment by critical high street and town centre businesses.
Ms Reeves launched a £25bn raid on businesses in her October Budget through higher employers’ National Insurance, with the changes set to take effect from April. That same month, companies will also have to pay for Ms Reeves’s higher than expected 6.7pc increase in National Living Wage. The insolvency statistics suggest bosses are giving up before being overwhelmed by the rising costs in the spring.”
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