Umbrella contractors may be relieved to learn that government data shows there has been a decrease in corporate insolvencies this year.
However, PwC has warned that company collapses will rise in certain sectors because of weak consumer spending and the impact of government austerity measures.
3,531 companies went into administration in the second quarter of this year, down 685 on the previous quarter. Government measures, such as tax deferral schemes and low interest rates have helped some businesses stay solvent.
However, Mike Jervis, PwC corporate insolvency partner, said firms are not out of the woods yet. The hospitality, leisure and retail sectors could well see an increase in insolvencies in the next 12 months.
He went on to point out that low consumer confidence is a real challenge in the short-term, but refinancing debt will become a challenge in the medium-term.
Despite the number of insolvencies decreasing across the UK as a whole, a report by KPMG indicates that Scotland was not so lucky and saw a 17% quarter-on-quarter increase to 329.
Small businesses were responsible for the majority of the failures as 286 Scottish companies went into liquidation. At the same time, the number of larger businesses calling in an administrator or receiver dropped by 19% to 43.
KPMG’s head of restructuring, Blair Nimmo, said small businesses are still finding it tough but larger organisations are now having fewer problems. He went on to add that funding was available, even for distressed companies and despite the burden of increased tax, lack of confidence and government spending cuts, the impact has not been as dramatic as some people had predicted.
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