New data from business distress indicator Red Flag Alert shows that British businesses may be at their lowest point since the start of COVID-19.

  • 589,168 businesses reporting significant financial distress in Q4 of 2021
  • County Court Judgements rose by 106%

With the governments protective measures for economically affected businesses now at an end, the insolvency industry is braced for a noteable spike in corporate liquidations.

A Perfect Storm for British Business

County court judgments (CCJs) against struggling businesses surged in last quarter, leaving more vulnerable companies at risk of compulsory liquidation.

‘This rise suggests creditors are now longer showing the restraint they did earlier in the pandemic’ commented insolvency practitioner Alan Bradstock. ‘Combined with the end of tax relief and the rise in inflation, it is inevitable that we’re going to see significant increase in insolvency events during 2022.’

“Our advice to company directors is to consult with your accountant, at the first sign of business distress, to check how close you are to actual insolvency. It’s also vital that directors have a clear understanding of your responsibilities to creditors so that you don’t inadvertently expose yourself to the risk of wrongful trading.”