New insolvency figures have sparked a call for struggling businesses on the Isle of Wight to seek help sooner rather than later.
The latest government statistics from The Insolvency Service show that the number of insolvencies fell sharply in June 2020 compared with May 2020 and June 2019.
But insolvency and restructuring trade body R3 says that the overall picture is still being clouded by emergency state support which has provided a safety net for many businesses and individuals.
R3 Southern & Thames Valley chair Garry Lee, who is an associate director in the recovery and restructuring services team at accountancy firm Smith and Williamson, said:
“These statistics still do not show the effects of the pandemic on personal and corporate insolvency levels.
“In part this is because of the time it takes to set up and enter corporate and personal insolvency processes, but also because of the Government’s support measures, which will have provided a valuable safety net for many people and businesses.”
The latest figures for England and Wales show that the number of corporate insolvencies – directors making the decision that their businesses are no longer viable – stood at 732 in June. That was down on 945 in May 2020 and half the 1,465 in June of 2019.
Meanwhile, there were 7,851 individual insolvencies in June 2020 compared with 13,848 in May 2020.
Garry added:
“Our members are telling us that requests for formal insolvency support have not been significantly higher than before the pandemic.
“However, there has been a significant increase in existing and new clients asking for support with managing a reduction in demand for their products and services, and guidance around how they can manage working capital shortages in cashflow forecasts as the economy gets moving again.
“The situation is still tough for many people with little sign of economic improvement on the horizon.
“That’s why anyone who starts to see problems with their business or personal finances on the Isle of Wight should seek advice from a qualified source as early as they possibly can.”
