David Alexander

The latest figures from the Accountant in Bankruptcy (AiB) show there were 283 corporate insolvencies in July to September 2023, up by 4.8 per cent on the same period in 2022.

Of these, 105 were compulsory liquidations – up 34.6 per cent – and 178 were creditors’ voluntary liquidations, down by 7.3 per cent.

It was previously the case that most corporate insolvencies were compulsory liquidation, but creditors’ voluntary liquidations have made up the majority since the start of the 2020/21 financial year.

David Alexander, head of debt recovery at Gilson Gray, said: “Corporate insolvencies in Scotland rising by 4.8 per cent on the same period last year reflects what we are seeing in the market.

“This will likely have a knock-on effect for the next six to 12 months on the personal insolvency sector, when creditors who hold personal guarantees against directors of struggling companies begin to enforce them. I have already seen an increase on that front in recent months and only see it continuing.

“With inflation stubbornly high and question marks over whether interest rates will rise again before the end of the year, conditions remain challenging for a lot of businesses.

“As ever, we would recommend directors being as proactive as they can, recovering outstanding debts wherever feasible. Advisers can also support you with any immediate credit issues and help direct your business towards a surer footing in the long term.”