MANY business owners have decided that they will not be able to weather short-term economic problems and are choosing to close their businesses.
That’s the view of an insolvency expert after official statistics showed business bankruptcies more than doubled in the past year.
There were 2,114 business bankruptcies in March, 39.4% more than the previous month and 111.6% more than in March 2021, according to the Insolvency Service of England and the Netherlands. Wales.
The total was 71.2% higher than the figure that entered the pandemic in March 2020.
Garry Lee, chairman of insolvency body R3 Southern Region, which covers Dorset, said: “The figures reflect the challenge businesses continue to face.
“The increase in business bankruptcies in March was driven by an increase in the number of voluntary creditor liquidations (CVL), a procedure initiated by the managers of insolvent companies to close their business, which was almost 40% higher than the previous month.
“This suggests that many business leaders have seen the increasingly difficult economic outlook in the short to medium term as something they will not be able to overcome and have shut down their businesses in advance.”
Personal insolvencies rose 17.2% month-on-month to 11,530, 5.3% higher than March 2021 and 47.2% higher than March 2020.
The increase was driven by an increase in Individual Voluntary Arrangements and Debt Relief Orders (DROs).
Mr Lee, associate director of the turnaround and restructuring services department at accountancy firm Smith & Williamson, added: “Businesses and individuals in Dorset and Hampshire have barely had time to breathe.
“The intersection between the end of the pandemic and the increase in energy, fuel and food has hit finances hard, and the situation could become more difficult as the year progresses.
“Anyone worried about their finances – business or personal – in Dorset and Hampshire are urged to seek help as soon as possible from a qualified and regulated adviser.
“Talking about money worries early gives you more options, more time to make a decision about your next move, and potentially a better outcome than if you had waited until the problem got more serious.”