THE number of firms going into liquidation in Scotland has surged amid the challenges posed by the pandemic official figures show.
The Accountant in Bankruptcy recorded 163 cases of firms entering liquidation, in the quarter to June 30, up 65 per cent on the 99 recorded in the same period in 2020.
The number of liquidations in the latest quarter was up around 80% on the three months to March 31, during which 91 were recorded.
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The increase was driven by a 132% rise in the number of creditors’ voluntary liquidations, to 132, from 57 in the same period last year.
Directors of some of the firms concerned may have decided they could not continue trading following months in which many busineeses faced challenging trading conditions.
Restructuring and insolvency trade body R3 said the figures reflected the tough three months the Scottish business community has been through.
“With an uneven easing of restrictions across the country, a number of businesses are still adapting to the ‘new normal’ and will have to wait a while before they return to pre-pandemic trading,” said Iain Fraser, who chairs R3’s Scottish Technical Committee.
Mr Fraser noted that while Scotland’s economy is recovering and business confidence has risen times remain tough for the retail, hospitality and nightlife industries.
He hopes the tide will start to turn for businesses as restrictions ease further in August and the vaccine rollout continues.
The numbers issued by the Accountant in Bankruptcy do not include firms entering an administration process, which some manage to trade out of.
Provisional figures from the Insolvency Service indicated seven firms entered administration in the quarter to June, down from 16 in the same period of 2020.
Mr Fraser said: “The business community wants to be as helpful as possible in the current circumstances, and this, coupled with the high levels of Government support and a ban on winding up petitions, has created an environment where fewer businesses are entering administration as a result of becoming insolvent.”
The number of compulsory liquidations fell to 31 in the quarter to June 30, from 42 in the same period of 2020 and 35 in the three months to March 31.
The Accountant in Bankruptcy noted: “Current levels of corporate insolvencies remain lower than Pre-Covid levels.”
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