Insolvency cases rose in 2017
The underlying total of company insolvencies rose in 2017, with an 8.2% surge in creditors' voluntary liquidations a key reason.
Official figures from the Insolvency Service for the fourth quarter reveal that two bulk insolvency events, relating to changes to claimable expenses rules skewed the figures for the year.
Overall company insolvencies rose, as 17,243 companies entered insolvency in 2017, a jump of 4.2% on the previous year.
More than 2,100 of those insolvencies occurred during the two bulk insolvency events, with large numbers of connected companies failing to comply with the new expense rulings.
A 6.3% rise in creditor voluntary liquidations meant the underlying number of company insolvencies - excluding the bulk events - was up by 2.5% year-on-year.
In some good news for small firms, other forms of company insolvency dropped, as 2017 saw a 15.6% decline in the number of company voluntary agreements and a 5.2% drop in administrations. Compulsory liquidations also fell by 4.5%.
Of the 17,243 firms to enter into insolvency proceedings, nearly three quarters of them - some 12,861 businesses - were creditor voluntary liquidations.
Out of the remaining cases, just shy of 2,800 were compulsory liquidations, 1,289 were administrations and 292 were company voluntary arrangements, as well as two receiverships.
Fourth quarter figures
In the fourth quarter, an estimated 4,382 firms entered insolvency, of which just over 3,400 cases were creditors' voluntary liquidations.
When compared to the third quarter of 2017, company insolvencies were up by 7.3%, although an estimated 1,000 companies were closely tied to a creditors' voluntary liquidation relating to expense rules.
If that bulk event is excluded from the figures, the number of company insolvencies dropped by 17.2% quarter-on-quarter, and was 10.9% lower than the same quarter 12 months previously.
A huge decline in the number of underlying creditors' voluntary liquidation cases was the driving factor behind this.
In terms of individual insolvency cases, the figures for the fourth quarter were broadly in line with those seen in the previous quarter, although the number of cases has jumped by more than 10% in the last year.
By Phil Smith