Did festive spirit keep company liquidation rate down?

Published on May 2, 2014 by Crawfords Accounting

The latest figures from the Insolvency Service seem to suggest seasonal generosity might have had an effect on the company liquidation rate in the run-up to Christmas 2013.

In the period from January to March 2014, company liquidations were up by 4.8% compared with the previous quarter, and 4.9% year on year.

But the compulsory company liquidation rate was up by a substantial 53.1% sequentially, and this is not because the first quarter of 2014 was particularly bad.

In fact, the Insolvency Service says the past three months were broadly in line with the long-term trend since 2012.

It was Q4 of 2013 that was the anomaly, with an unusually low rate of compulsory company liquidations.

This may have been due to seasonal spirit from creditors, who waited until the new year to petition for liquidation.

Or it may simply be that the Christmas shopping rush helped some so-called ‘zombie businesses’ to make it through a couple of extra months.

Either way, it seems the long-term trend has resumed, and with company liquidations on the increase once again, prompt advice on corporate recovery is likely to remain a ‘life or death’ decision for many businesses in 2014.

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