Wednesday, 25 July 2012

Scottish Insolvency figures show a deteriorating situation

The Accountant in Bankruptcy, the equivalent of the Insolvency Service in Scotland, has published its latest insolvency statistics that show that 420 companies went into administration or liquidation in the first quarter of this year.  This is a 22.4% increase in the same period as last year.  This is in stark contrast to the overall fall of 6% in insolvency figures for England and Wales. 

HMRC appear to have been much more aggressive in Scotland with the number of winding up petitions being issued increasing by 75% over the last 3 years according to research done by Pinsent Masons.  This is again in contrast to England and Wales where winding up petitions are falling month on month.   Joanne Gillies, a partner at law firm Pinsent Masons, said: “Patience seems to be running out for those businesses that have been given time to trade their way out of trouble – either by financiers or other parties such as HM Revenue & Customs (HMRC).

Winding up petitions in Scotland are much more damaging to companies in Scotland than they are in England and Wales.  Please read our page on winding up petitions in Scotland for more information.  Basically though once a petition is presented they are "walled" at the court and everyone knows about it.  This means that the debtor company has little option but to go into liquidation or administration.



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