Business insolvencies down 4.7%

The number of businesses going into administration in England and Wales in the third quarter of 2009 declined 4.7% from the previous quarter, according to figures released by the Insolvency Service.

However, the amount of companies going bust in the third quarter of 2009 was still 14.6% higher than the same period a year ago, and the number of personal insolvencies has risen 28% from the same period last year.

Experts have warned that more small and medium-sized businesses that are behind on tax could enter administration as the HM Revenue and Customs (HMRC) starts to apply pressure on businesses which are behind on tax.

"There is talk that the recession will technically end in the fourth quarter, but for some companies the recession will really hit home when the Revenue calls in its debts. Margins are still being squeezed and many companies are fighting for survival, with employees often the victims of essential cost cutting,” said Alan Tomlinson, partner at Tomlinsons, a licensed insolvency practitioner.