THE number of businesses being forced into insolvency through winding-up orders has reached a post-Covid high, experts have warned.

Although the total number of businesses insolvencies fell in September compared with the previous month, the insolvency body R3 says compulsory liquidations were at their highest since February 2020.

Its chair in Dorset and Hampshire says the figures suggest creditors are becoming “more aggressive” about unpaid debts.

Statistics for England and Wales from the Insolvency Service showed corporate insolvencies stood at 1,679 in September – down 13.5 per cent on the previous month but up 15.6 per cent on September 2021.

However, the number of compulsory liquidations in this figure rose 36 per cent month-on-month to 204.

A compulsory liquidation is usually the result of a winding-up petition brought in court by a creditor who says they are owed money.

Garry Lee, chair of R3’s Southern and Thames Valley region, including Dorset and Hampshire, said: “Compulsory liquidations have been creeping up since the summer and are now reaching pre-Covid levels.

“The end of a temporary ban on the use winding-up petitions at the start of this year has meant that creditors have become free once again to pursue this course of action to try and claw back monies they are owed.

“The recent increase suggests that creditors, who may themselves be facing challenges caused by the withdrawal of Covid support and continued economic turbulence, are becoming more aggressive over unpaid debts as pressure grows.”

Other types of corporate insolvencies included in the figures are creditors’ voluntary liquidations, administrations and company voluntary arrangements.

Mr Lee, who is an associate director in the recovery and restructuring services department at Evelyn Partners’ Southampton office, said: “Businesses have been operating against a backdrop of real uncertainty in recent weeks and months.

“A volatile pound, a decline in consumer confidence and lower household spending have led to weaker economic growth, and it seems likely that these conditions will get worse before they get better.

“With costs rising, both business owners and employees are under significant financial strain as rising costs have meant rising salary demands and increasing pressure on margins, which some businesses haven’t, unfortunately, been able to meet.”

He added: “Most R3 members offer a free initial consultation to business owners or individuals so they can understand their situation and outline the options that are available to help them move forward."