The return of the compulsory liquidation
Until Q4 2022, the first quarter of 2020 had provided us with the last time that compulsory winding up orders (WUOs) were above 700 in a single quarter, bringing an average of 7.7 winding up orders being granted per day.
Following government interventions and restrictions throughout the pandemic, winding up orders dwindled to just 102 in Q2 2021 – an average of 1.1 orders per day. The same can be said for winding up petitions (WUPs), which dropped 90.3% in the 12-month period from Q1 2020 to Q1 2021 – representing a significant decrease on both fronts.
Since Q2 2021, winding up orders have been increasing quarter-on-quarter. In addition, since the lifting of restrictions in April 2022, HMRC have issued 703 of the 2,526 winding up petitions (equating to 27.83%).
Significant increases in winding up petitions and winding up orders emphasise the possibility of UK businesses suffering bad debts and, in some cases, irrecoverable losses. It is imperative to pay attention to your customers, their payment habits and financial health and trends, as well as ensuring all claims are lodged correctly and in a timely manner.
Our KS Vision tool can provide same day alerts of important data changes, as well as helping to bring a simple and straightforward journey when the liquidation process becomes necessary.
If you have any questions on winding up orders, or any other restructuring and insolvency process, please get in touch with the experienced team at Moore Kingston Smith Licensed Insolvency Practitioners. Our team can offer practical, down-to-earth advice to help ensure reasoned solutions for your business.
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