STORM COULD YET HIT FAILING FIRMS.
ACCOUNTANTS have warned that a fall in corporate insolvencies may be the calm before the storm if the government starts getting tough on failing firms.
The Insolvency Service revealed that there were 4,716 company failures in England and Wales in the third quarter, which is a fall of 4.7% on the previous quarter, but a 14.6% increase on the same period a year ago.
Breaking the figures down further 1,301 of the insolvencies were compulsory liquidations - down 9.8% on the previous quarter and 12.9% on the same quarter last year - and 3,415 were creditors' voluntary liquidations which were 2.6% down on the second quarter, but 30.2% up on the corresponding period in 2008.
Brian Johnson, insolvency partner at chartered accountants HW Fisher & Company, said: "Although third quarter figures will be generally welcomed by the business community, this fillip of good news shouldn't deflect attention away from the fact that corporate insolvencies were still up almost 15% on the same period last year.
"The 4.7% decrease in compulsory and creditors' voluntary liquidations may reflect the summer lull but may also be a result of the reduction in the number of insolvencies instituted by HM Revenue & Customs, as the government tries to support businesses."
He added: "However, this relaxed attitude by the HMRC is expected to harden in the near future and this will have a significant impact on the number of insolvency petitions being issued.
"Also, despite the drop in compulsory insolvencies in quarter three, the trend continues to be upwards. It has been a terrible year for UK businesses."
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|Publication:||Liverpool Echo (Liverpool, England)|
|Date:||Nov 11, 2009|
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