Insolvency News & Commentary

UK company insolvencies are running at their highest sustained level since the early 2000s. The Insolvency Service‘s quarterly statistics for Q1 2024 recorded 5,209 company insolvencies, of which roughly 88% were Creditors’ Voluntary Liquidations.

Behind that headline figure sit four trends that change how you should think about your own position. HMRC’s reinstatement as a secondary preferential creditor in December 2020 has shrunk floating-charge recoveries. The Supreme Court’s BTI v Sequana decision in 2022 pushed the creditor-duty threshold earlier than it used to be.

The construction-hospitality-retail sector cascade is still building, and the BHS Group case set a £18m contribution-order benchmark that has changed how liquidators think about wrongful-trading quantum.

This is the page where we synthesise the trends, the sector data, the regulatory shifts, and the case-law developments that change director exposure in real terms. Not news for news’s sake; news that signals where action is needed, and where it isn’t.

Insolvency News and Commentary at a Glance

This hub aggregates four streams of intelligence:

• Statistical trends from the Insolvency Service quarterly publication and commercial credit reference agencies
• Sector analysis identifying where insolvency rates are rising fastest and why
• Regulatory updates; CIGA 2020 operation, FA 2020 changes, the 2021 Act, and the 2021 Regulations on connected-party pre-packs
• Case-law commentary on the decisions reshaping director-liability framework, especially BTI v Sequana, Re Virgin Atlantic, and the BHS Group judgment

The “trend signal vs noise” framing matters. Directors need pattern context, not just isolated statistics. A 23% year-on-year increase in construction insolvencies is one statistic; the implication that subcontractor chains in your sector are at heightened risk is what you can act on.

Key Insolvency News Trends: What the Statistics Are Saying

Volume: Q1 2024 recorded 5,209 company insolvencies; the highest quarterly figure since 2003. The 12-month rolling rate sits at approximately 20,000 company insolvencies per year, materially above the pre-pandemic baseline of 14,000-15,000.

Procedure split: CVL remains the dominant route at approximately 88% of all company insolvencies. Administrations make up roughly 6%, compulsory liquidations around 5%, and CVAs the remaining 1%.

The CVA share has fallen since 2020; partly because HMRC’s secondary preferential status makes the 75% by value approval threshold harder to reach, and partly because the Restructuring Plan under Part 26A CA 2006 has absorbed some of the complex restructuring volume.

HMRC effect: The Finance Act 2020 reinstated HMRC as a secondary preferential creditor for trust taxes (VAT, PAYE, employee NIC, CIS) with effect from 1 December 2020.

The Insolvency Service has not published direct creditor-recovery data, but practitioner consensus is that SME bank recovery rates on floating charges have fallen by 10-30 percentage points where significant trust-tax balances exist.

Director Redundancy claims: RPS payouts to directors of liquidating companies have risen alongside insolvency volume; a useful funding signal for directors facing CVL fees without cash.

Insolvency News by Sector: Failure Cascades and Risk Concentration

Four sectors deserve close attention in 2024-25:

Construction. Highest insolvency volume by sector since 2022. The cascade pattern; main contractor failure triggering subcontractor non-payment + supplier credit withdrawal; runs through chains that can include 200+ businesses. Carillion remains the case study; the modern version plays out at lower-profile mid-market scale every quarter.

Hospitality + retail. The pandemic created a 2-year working-capital hole that the cost-of-living crisis has compounded. Business rates revaluation effects (the 2023 list valuations are still being challenged) compound input-cost inflation. The Q1 2024 retail insolvency rate was 18% above the 5-year average.

Manufacturing. Customer payment terms have extended materially since 2022; 60-90 days is now common where 30-45 was the historic norm. Combined with input-cost inflation, this has squeezed working capital across the sector. Invoice finance has grown rapidly in response, but at the cost of recurring 2-4% fees that eat margin.

Care homes. Regulatory pressure (CQC enforcement + workforce shortages) combined with local-authority commissioning delays has created a sustained insolvency pattern. Specialist administrators (BDO, Begbies Traynor, Quantuma) have built care-home practices around the recurring volume.

If your business sits in one of these sectors, the insolvency intelligence is operational for you. Your counterparty risk needs active monitoring. Your customer concentration above 30% becomes a single-point-of-failure exposure. And the rescue procedures (CIGA Part A1 moratorium, CVA, Restructuring Plan) should be familiar to you before you need them.

Insolvency News: Regulatory Changes and Compliance Signals

Three regulatory layers shape the current framework:

CIGA 2020. The Corporate Insolvency and Governance Act 2020 introduced Part A1 of the Insolvency Act 1986 (standalone moratorium) and Part 26A of the Companies Act 2006 (Restructuring Plan with cross-class cram-down).

The standalone moratorium gives 20 business days breathing space (extendable) under monitor (licensed IP) supervision. The Restructuring Plan absorbs complex SME/mid-market restructurings that would previously have gone through Scheme of Arrangement or administration.

2021 Regulations. The Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021, in force from 30 April 2021, made evaluator’s reports mandatory for connected-party pre-pack sales under administration. SIP 16 was updated to reflect the new requirement.

The Pre-Pack Pool (voluntary review service since 2015) was superseded by the statutory evaluator framework.

2021 Act. The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 gave the Insolvency Service direct power to investigate dissolved companies without restoration, for 3 years from dissolution. The BBL Audit Programme has used this route to investigate ~1,500 directors and produce disqualifications.

These three layers operate together. A director considering pre-pack administration needs the 2021 Regulations framework. A director considering strike-off with debts outstanding needs the 2021 Act exposure framework. A director considering CVA needs the CIGA 2020 alternatives (Part A1 moratorium + Restructuring Plan) on the table.

Insolvency News: Case Law Shaping Director Exposure

Three Supreme Court / Court of Appeal decisions matter:

BTI 2014 LLC v Sequana SA [2022] UKSC 25. The Supreme Court confirmed the creditor-duty doctrine first established in West Mercia Safetywear v Dodd [1988] BCLC 250. The duty engages when insolvency is “probable”; not when liquidation is unavoidable.

The Sequana facts involved a dividend paid 9 years before the company’s eventual insolvency, and the court considered whether the duty had been engaged at that date. The case has pushed creditor-duty timing earlier than most directors previously assumed.

Re Virgin Atlantic Airways Ltd [2020] EWHC 2376 (Ch). First UK Restructuring Plan under Part 26A CA 2006 / CIGA 2020.

Established the cross-class cram-down mechanism in practice; dissenting classes can be bound if the “no worse off” test is satisfied. Re Smile Telecoms developed the jurisprudence further on disclosure requirements and class composition.

BHS Group case (2024). Joint liquidators of BHS Group pursued former directors for wrongful trading + misfeasance + breach of duty. The court ordered Dominic Chappell + co-directors to contribute £18m collectively + imposed disqualifications of 11-15 years.

The case set a benchmark for wrongful-trading contribution-order quantum that liquidators now reference routinely. Even where the company’s recoverable assets are limited, the directors’ personal contribution-order exposure can run into millions.

Practitioner takeaways:

• Sequana + earlier creditor-duty threshold = directors need to track insolvency probability earlier, with documented decision-making
• Restructuring Plan availability = mid-market complex restructures have a viable route that did not exist before 2020
• BHS Group quantum = wrongful trading is not theoretical; £18m precedent reshapes settlement negotiations

Your Next Step

If you are monitoring insolvency trends as commercial intelligence rather than crisis triage:

1. Track Insolvency Service quarterly statistics. Published 30-45 days after quarter-end at gov.uk/government/collections/insolvency-service-official-statistics. Headline numbers + sector breakdowns + regional patterns.
2. Sector-specific intelligence. Industry-body reports, trade-press analysis, commercial credit reference agency data (D&B, Experian, Creditsafe) for counterparty risk monitoring.
3. Regulatory updates. gov.uk’s Insolvency Service news page + Companies House service announcements track procedural changes.
4. Case-law commentary. Practitioner publications (Insolvency Lawyers’ Association journal, R3 commentary, Practical Law Insolvency module) for case-by-case implications.
5. Free IP diagnostic call if specific concerns about your company’s position; industry-wide free under s.388 IA 1986 + IPR 2005.

For directors using this hub as crisis-triage signal: the news content tells you that you are not alone. The procedural routes (CVA, Restructuring Plan, administration, CVL) work the same way they always have, and the IP diagnostic call is the cheapest way to identify which one applies.

Frequently Asked Questions About Insolvency News and Commentary