Business Insolvencies Bump to Record Levels in April; Taxes Add Extra Stress
What’s the Buzz? Numbers That Matter
- April Insolvencies: 2,053 filings in England & Wales – a 3% climb from March.
- Year‑on‑Year Trend: Still 5% below the same month last year.
- Voluntary Liquidations: 1,544 companies chose to close shop on their own terms.
- Compulsory Liquidations: Reached a high unseen in more than five years, largely driven by HMRC chasing unpaid debts.
Why Are Businesses Feeling the Pinch?
Rachel Reeves joined the payroll by boosting both the employer’s National Insurance contribution and the minimum wage. It’s a tax hit that has left many firms tightening belts, implementing pay freezes, and in some cases, planning mass redundancies. Think of it as a sudden surprise cake that’s actually a bite‑size pastry – nice, but you’re not sure if you’re supposed to eat it.
Voices From the Front Lines
Tom Russell, President of R3 (UK’s insolvency & restructuring trade body) says: “Creditors’ voluntary liquidation is still the go‑to option for most companies. The numbers stay stubbornly high because businesses are juggling a storm of costs, politics, and economic uncertainty. It’s a tough slog that chips away at both finances and confidence.”
Jo Hewitt, Senior Managing Director at FTI Consulting adds: “In March 2025, we saw a modest 3% uptick in insolvency filings. Still, whether firms will survive the mix of market swings and tariff fog is unclear, because the ripple effects on supply chains need time to surface. Even a short‑term interest‑rate cut may offer a temporary cushion for heavily leveraged borrowers, but looming drivers—like higher National Insurance and falling oil prices—alongside ongoing geopolitical jitters, hand a distressing hand to certain sectors in the months ahead.”
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