Monday, December 30, 2024
Businesses under pressure
The news site says that restructuring bosses have cautioned that impending cost rises linked to the autumn Budget could particularly weigh on the retail, hospitality and care sectors after official figures pointed towards an uptick in insolvencies at the end of this year:
Company insolvencies lifted by 13% in November compared with the previous month, although they were lower year-on-year, according to the Office for National Statistics.
DIY and garden retailer Homebase was among firms to collapse into administration in November.
Insolvency practitioners said they have witnessed an increase in inquiries in the run up to the new year.
Nicky Fisher, immediate past president of R3, the UK’s insolvency and restructuring trade body, and a partner at Herron Fisher, said: “Our members are telling us that inquiries from directors increased in November, as they looked to understand more about their insolvency or restructuring options and discuss their financial concerns ahead of January.
“The December period will either be a lifeline or the tipping point for a number of businesses – especially those in the retail and hospitality sectors, who have had a challenging year of continued rising costs coupled with cautious customer spending.”
Firms are set to face significant costs increases as a result of increases to National Insurance contributions, the rise in the minimum wage and some other tax rises.
The policies were announced by the Chancellor Rachel Reeves in the autumn Budget in order to support a jump in spending.
Ms Fisher added: “With the changes to employer National Insurance and National Minimum Wage being introduced in April, the next three months will be critical for firms in these industries and others as they work out how they will manage the impact this additional cost will have on their finances.
“This could lead to an uptick in restructuring work in the first quarter of this year or a rise in corporate insolvencies between March and June – but at this stage it’s too early to tell which of these outcomes is most likely.”
If Starmer's government are serious about growing the economy, then this is an issue that should be at the top of their agenda rather than their misguided attempt to undo regulations that protect the public.
