News Item: Response to National Insolvency Report
The construction industry is always vulnerable in times of economic crisis and features high in the table of statistics for insolvency. However, new statistics on company and individual insolvencies in England and Wales for September have been released (14 Oct 2020) and the overall number of insolvencies is reported to be low in September 2020 in comparison to the same month in 2019 (Insolvency Service Main messages for England & Wales (14 Oct 2020).
The overall reduction in company insolvencies was likely to be in part driven by the range of government support put in place to financially support to companies in response to the coronavirus (COVID 19) pandemic. The government also announced in late April that it would temporarily prohibit the use of statutory demands and certain winding-up petitions from 27 April to 30 June 2020 under the Corporate Insolvency and Governance Act 2020. This was later extended to 30 September, and last month was further extended to 31 December 2020 (extract Insolvency Service England & Wales).
The true picture of the impact of company and individual insolvencies to the construction industry is likely not to be fully understood until the 12 months ending 2021 as the nation fluctuates between local and national lock down measures. Statistics released by the Registry Trust are a good indicator of the economy, however the construction industry contributes seven percent of the economy and received the highest number of insolvencies by sector in the 12 months ending Q4 2019, the construction industry group saw the largest increase in underlying insolvency volumes with 3,198 (69 more, a 2.2% increase) compared with the 12 months ending Q3 2019.
Emma Miller, Company Director at Top Service says: "We are seeing first-hand the struggles and challenges our members are grappling with in the wake of national lockdown and severe disruption to trade. We advise our members to consider alternatives in their debt collection procedures for example, in response to reduced operational running of the courts and reduced HMRC enforcement activity since UK lockdown was applied on the evening of 23 March; Temporary restrictions on the use of statutory demands and certain winding-up petitions have been extended to 31 December 2020, taking the opportunity to not send overdue accounts straight from credit control to legal action but use a third party in between, saving court costs and the frustrations involved of taking legal action. At Top Service we have adapted our collections methods to suit the struggles of contacting companies who are working from home and potentially on furlough – achieving great results. We advise members to look at their options for collection, take advice from their collections service provider on the best course of action and consider all options, a one-step approach is not always the most effective."
Are you struggling to recover the money you are owed?
Top Service's debt recovery service is operating normally. Their team are proving that their skills are second to none with the results they are achieving during this challenging time. Top Service members have access to an exclusive combination of no collection, no fee recovery services.
Emma continues: "We welcome the opportunity to talk to you about any bespoke changes you would like to make to our debt recovery procedures to fit the culture you have for maintaining customer relationships, whilst addressing the need to keep cash flow as fluid as possible for your business. Please contact our collections team to talk through any individual cases or to explore how else we can support you."
Contact the Top Service helpdesk today on 01527 518800 to discuss how they can support and help you protect your business.