![\"\"](\"https:\/\/i0.wp.com\/magazine.dailybusinessgroup.co.uk\/wp_mag14\/wp-content\/uploads\/2026\/01\/Blair-Milne-of-Azets.png?resize=300%2C202&ssl=1\")
<\/figure>\n<\/div>\nHead off mounting problems by seeking advice before the situation gets worse, writes BLAIR MILNE<\/strong><\/h4>\n
\nThe number of corporate insolvencies in 2025 is slightly up on 2024. The trend is clear: management teams and business owners continue to face a volatile and uncertain operating environment.\u00a0 This pressure is becoming the norm over the medium term, with no respite on the horizon. For many, continuing to trade after years of economic and political turbulence is simply becoming too difficult.<\/p>\n
Turnaround options and access to finance are increasingly limited, and key creditors, in particular HMRC, are taking an increasingly tougher stance on chasing down debt.<\/p>\n
Compulsory liquidations were 13% higher in 2025 than in 2024, and 23% higher than in 2023.\u00a0CVLs (Creditors\u2019 voluntary liquidations), administrations,\u00a0CVAs\u00a0and receivership appointments were all similar to the numbers seen in 2024. Of the 111 insolvencies in December 2025, 69\u00a0were CVLs, 35 were compulsory liquidations and seven were administrations. There were no\u00a0CVAs\u00a0or receivership appointments in the month.<\/p>\n
CVLs, when directors bow to the inevitable and voluntarily close an insolvent company unable to pay its debts, continue to be the most commonly used corporate insolvency process and remain well-above pre-pandemic levels.\u00a0<\/p>\n
The increases to Employers\u2019 National Insurance and National Minimum Wage have hit firms hard. Both came after years of rising costs, shrinking margins and cautious customer spending. This has been the final straw for many firms who were struggling to stay solvent.<\/p>\n
Businesses also had to contend with inflation remaining above target levels, interest rates not falling as fast as predicted, and the ripple effect of the US tariffs which were announced in the first half of 2025.<\/p>\n
The retail and leisure sectors have been some of the hardest hit. A bleak Black Friday and a dull Golden Quarter (October to December) were a body blow for retailers at the end of a tough year, and came at a time when many were desperate for a financial shot in the arm.\u00a0<\/p>\n
We expect the High Street will continue to be hit hard in 2026 as the bigger retailers cut costs and sites, and the struggling smaller ones either close or move towards an online model, and ultimately, this is likely to lead to the High Street contracting further.<\/p>\n
The construction industry has also suffered with rising material and staff costs becoming unsustainable for businesses in a sector that runs on tight margins, long payment times and legacy contracts whose predicted profits may not materialise once the job has been completed.<\/p>\n
While the industry appears more confident about its fortunes this year, cost, labour and payment pressures will continue to affect firms as much in 2026 as they did in the previous 12 months.<\/p>\n
Anyone worried about their business should seek advice as soon as possible \u2013 and the best time to do this is as soon as the signs of financial distress appear.<\/p>\n
Falling cashflow, rising stock levels, missed payment deadlines and worries about paying staff, taxes or suppliers are all warning signs that a firm could be at risk of becoming insolvent.<\/p>\n
If you see any of these in your business, that\u2019s the time to pick up the phone and speak to an adviser.<\/p>\n
We know it\u2019s a hard conversation to have but the sooner you start it, the sooner you\u2019ll be in a position to take steps to improve your situation, and the more options you\u2019ll have to turn it and your business around.<\/p>\n
Blair Milne is a corporate insolvency partner at accountancy and business advisory group Azets<\/em><\/p>\n>Latest Daily Business news<\/p>\n
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