Brexit deemed biggest business insolvency threat
Brexit ranks as the number one threat to British businesses over the next two years, according to a survey of the insolvency and restructuring sectors.
The Institute of Chartered Accountants in England and Wales (ICAEW) surveyed a number of firms in the sectors to rank the three greatest threats to business.
Some 73% of individuals working for insolvency practitioners and restructuring firms felt Brexit poses the biggest threat to be overcome, while 56% view the rise in interest rates as another major danger.
The attitudes of HMRC and banks when acting as creditors could also cause issues for businesses, according to 43% of those questioned.
ICAEW regional director Bob Pinder has warned businesses to be watchful of the business environment, as unexpected costs could force businesses into insolvency.
“We are in no doubt that businesses in the UK face difficult times ahead,” he added, suggesting that businesses also need to confront the issues they face head on.
The key is to seek help from insolvency practitioners at the earliest opportunity, as it means finances can be restructured and business management processes implemented.
While admitting that a business is struggling can be a tough decision to make, it also means the right support can be sought to ensure a firm remains trading.
More than three quarters of those questioned believe the retail sector will face significant challenges, while over two thirds also say care homes could struggle.
Around 44% of respondents also expect the healthcare sector to encounter difficulties with Mr Pinder saying the ultimate difference between those that survive and enter insolvency will be how they manage and overcome those difficulties.
Recognising underperformance will be key, as he added that businesses will need to act before reaching crisis point – this will enable a firm to move away from insolvency and towards stabilisation and recovery.
By Phil Smith