Company failures

Scots firms going bust at highest rate for a decade

lock on gates at bar
More companies failed last year (pic: Terry Murden)

Scottish business are failing at their highest rate for more than a decade as creditors chase unpaid bills in an attempt to balance their own books.

High costs of rent, energy and raw materials, together with higher wage demands, contributed to a 3% year on year rise in corporate insolvencies to 1,168 for 2023-24, the highest since 2012 (1,369).

Figures from the Accountant in Bankruptcy show last year’s figure was up 23% compared with pre-pandemic 2019-20.

The data for Scotland also showed an increase last year in personal insolvency numbers, relating to bankruptcies and protected trust deeds. There were 8,085 personal insolvencies in 2022-23, up 1 per cent on the 8,001 in the preceding year.

The annual rise in corporate insolvencies has been partly driven by an increase in compulsory liquidations, which have grown by almost a third from last year.

Compulsory liquidations have increased by more than 31% compared with last year as creditors chase down debt in an attempt to balance their own books, although the numbers for this process remain below pre-pandemic levels.

Creditors’ voluntary liquidation levels have fallen slightly compared with last year, but 2023’s total is still more than double 2019’s as a large number of directors are winding up their businesses amid a harsh trading climate.

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