UK IT and Computer Consultancy Insolvency Statistics

There were 401 IT and computer consultancy insolvencies between January and June 2026, against 443 in the same six months of 2025, a fall of 9.5%. Information and communication as a whole fell by almost exactly the same amount, 9.9%, from 725 to 653, because IT and computer consultancy is not a small corner of that section, it is most of it.

These are Company Debt calculations from Insolvency Service Table A1b data.

The rolling 12-month figure tells a slightly gentler version of the same story. At 858 cases for the year to June 2026, against 880 for the year to June 2025, the sector’s decline over that longer window, 2.5%, has been milder than the section’s.

The smaller trades sharing information and communication with it, data processing, other information services, publishing, have fallen faster this year. IT consultancy is not diverging from its section so much as it is dragging the whole section wherever it goes.

This is not a sector fighting a trend that belongs to somebody else, the way a single flat trade sometimes sits inside a section that is otherwise recovering. IT and computer consultancy is what information and communication insolvencies mostly are.

The smaller trades around it move a great deal more, because they start from a much smaller base. Data processing, hosting and web portals fell 45.5% year to date. Other information service activities fell 45.5% too. Publishing fell 18.9%.

Other telecommunications activities is the outlier, up 12.9%. None of those moves says much on its own, a handful of cases in a small category swings the percentage wildly, but together they show a section with no single story except the one IT consultancy is telling.

Read the peer table as context, not competition. An IT consultancy cannot point anywhere else in information and communication and find a materially different sector economy: this is the economy.

IT and computer consultancy insolvencies held in a narrow band before the pandemic: 488 in 2016, rising gently to 550 by 2019. 2020 brought a fall to 425, the same pattern seen across most of the economy while government support schemes and restrictions on winding-up petitions held the normal insolvency cycle back.

What happened next did not happen elsewhere in the same way. 574 in 2021, 789 in 2022, 883 in 2023: three years of increases that took the sector to nearly double its pre-pandemic level, driven by a surge in company formations as businesses raced to digitise.

The contractor market boomed on the back of remote-work technology spending. A lot of those companies were formed fast, in a hot market, without much of a cushion.

2024 brought the peak, 906, and 2025 held almost exactly there, at 900. Three years past the sharpest rise, IT consultancy has not come back down. It has plateaued at a level that would have looked like a crisis in any year before 2022.

In the IT consultancy cases we see, the company usually looks fine on paper for longer than most, because a services business with no stock and no factory floor can keep going a surprisingly long time on discipline alone. What we are actually looking at is the gap between when a contract ends and when the next one starts, and how many months of that gap the company can fund before it cannot.

The pattern that catches directors out is concentration. One client becomes most of the billing without anyone deciding it should, because saying yes to more of a good client’s work is always the easier call than chasing a second one. When that client’s IR35 determination changes, or their budget freezes, or they simply do not renew, there is no second client to lean on while a new one is found.

VAT is usually where it shows first, one quarter paid late while a determination is contested or a client payment slips, then never quite caught up.

By the time a director calls us, HMRC arrears have often been running for two or three quarters, and the personal guarantee on an invoice-finance facility or a business loan is the thing that has actually kept them awake, even when the conversation starts with the contract pipeline.

We would not start with day rate or turnover. We would look at how many months of unbilled bench time the company’s cash reserves would cover today, how concentrated the client base actually is, whether any live IR35 determination could turn into a backdated liability, and what is owed to HMRC and for how long.

None of that means the business is unsound. A consultancy that has simply run into a slow patch between contracts, or is waiting on one delayed client payment, usually has more options than it thinks, provided the conversation happens before a creditor forces the timing.

SIC group 620 covers companies whose recorded primary business is computer programming, consultancy and related activities: software development, systems design, IT project consultancy and related technical work sold to other businesses. It does not include telecommunications, data hosting or the wider information and communication section’s other trades, which are recorded separately.

This is one of the largest single SIC groups on this site, at more than 800 insolvencies a year, so month-to-month figures are a more reliable guide here than on the smaller sector pages. Even so, the year-to-date and rolling 12-month totals are the steadier measure.

These are company counts, not the number of contractors, consultants or clients affected. A single insolvent company may be a one-person personal service company or a consultancy employing dozens, and this page cannot distinguish between them.

The figures are insolvency volumes, not a failure rate. They are not adjusted for the number of active IT consultancies, which has grown substantially since 2019, so a high count does not, on its own, mean a high rate of failure.

The SIC 620 figures come from Table A1b and are not seasonally adjusted. The latest month is provisional and can be revised.

None of the figures above decide whether a particular consultancy is viable. What matters is narrower: whether the pipeline covers the bench time between contracts, whether one client’s decision could take out most of the billing at once, and what is genuinely owed to HMRC once any live IR35 determination is accounted for.

Plenty of IT consultancies in difficulty are sound businesses carrying a working-capital gap or an HMRC arrears bill built up during a slow quarter, and both of those are usually fixable if addressed early enough.

If you are reading this with a payment run coming and a client invoice that has not landed, the thing worth knowing is that the earlier you speak to someone, the more room there is to move: supplier or lender terms renegotiated, an HMRC Time to Pay arrangement, or a rescue procedure such as a Company Voluntary Arrangement or administration.

Once a winding-up petition is advertised, the bank account is usually frozen within days, and at that point creditors’ voluntary liquidation may be the only route still open. If you want to talk it through first, our insolvency advice for directors is the place to start.