UK corporate insolvencies edge higher in July

Corporate insolvencies in England and Wales rose slightly in July 2025, with 2,081 companies entering formal insolvency, according to the latest government figures. This marked a 1.4% increase from June’s total of 2,053 and was broadly unchanged from July 2024’s figure of 2,078. Compared with July 2023, however, insolvencies were up by 15.2%, highlighting the longer-term pressures facing UK businesses.

The July total comprised 339 compulsory liquidations, 1,583 creditors’ voluntary liquidations (CVLs), 147 administrations and 12 company voluntary arrangements (CVAs). No receiverships were recorded. While CVL numbers remained steady compared to both June 2025 and recent averages, compulsory liquidations were notably higher than both last month and last year, reflecting a more aggressive stance by creditors, particularly HMRC. Administrations also edged up, while CVAs fell.

On a rolling 12-month basis, one in every 190 companies on the Companies House register (52.5 per 10,000) entered insolvency between August 2024 and July 2025. That represented a decline from the 56.6 per 10,000 recorded over the previous 12-month period. Despite recent increases compared to the pandemic lows, insolvency rates remain well below the peak of 113.1 per 10,000 seen during the 2008–09 recession, partly because the total number of companies on the register has more than doubled since then.

The latest figures come against a backdrop of uneven trading conditions. Retail and hospitality businesses continue to struggle with rising costs, shifting consumer behaviour, and patchy demand. In construction, insolvencies remain elevated despite an uptick in output, with firms still contending with supply chain bottlenecks, labour shortages, and changes in the housing market.

“Compulsory Liquidations were higher this July than compared to one and two years ago. Our members are reporting that HMRC is taking a more assertive stance towards enforcement, with greater appetite to recover unpaid taxes through the courts,” Russell said. “Directors are feeling the impact of this firmer enforcement, which is adding pressure on businesses already navigating a challenging market.”

He noted that many directors appear to be holding off on voluntary closures, either because trading has improved slightly or due to uncertainty about the economic outlook. “A sense of caution remains widespread. Many firms are sitting at a crossroads, delaying major decisions until they see which way the economy moves,” he added.

Economic backdrop cautiously improving
UK economic activity picked up in June following a weak April and May, helping GDP to grow by 0.3% in the second quarter. Combined with a recent interest rate cut, this has provided some relief for businesses. However, Russell warned that high inflation and subdued consumer confidence continue to weigh on corporate health.

“The outlook for businesses appears slightly more positive, though it is too soon to gauge the full effect,” he said. “Our members report that directors are taking stock of their position and seeking professional advice, often as part of contingency planning should expected investment not materialise, or to ensure boards are clear on their options and responsibilities should insolvency become a risk.”