Written by: Keith Tully
Date: Thursday 12th October, 2017
The impact of Brexit and the process of Britain departing from the European Union is likely to push up rates of insolvency among businesses throughout the UK.
That’s according to a majority of respondents to a survey of insolvency and business recovery professionals carried out recently by the Institute of Chartered Accountants in England and Wales (ICAEW).
As many as 73 per cent of the insolvency and recovery experts polled cited the impact of Brexit as the foremost threat to the solvency of UK companies over the course of the next few years.
Other issues that experts say could present a challenge to companies across the country in the next 24 months include interest rate rises, the attitudes of HMRC and problems with creditors.
Current expectations are that the retail sector could be the worst hit when it comes to corporate insolvencies in the coming months as the Brexit process unfolds and the Bank of England potentially raises its base rate of interest.
“We are in no doubt that businesses in the UK face difficult times ahead,” said Bob Pinder, a regional director with the ICAEW.
“A sharp and unexpected rise in the cost of doing business can make managing liquidity tough.
“We believe that a change in attitudes is critical in order to successfully avoid substantially increased corporate insolvencies – confronting business issues, rather than being ashamed of them.”
Mr Pinder’s advice to any company concerned about their ability to remain solvent in the coming months is to seek early help from business restructuring experts and insolvency practitioners where relevant and required.
Prime minister Theresa May triggered ‘Article 50’ in late March this year and effectively declared the UK’s intention to depart the EU in two years.
The latest figures from the research firm Capital Economics suggest that confidence about the UK economy was lower among small British businesses in September 2017 than was the case 12 months before, with prolonged uncertainty surrounding Brexit considered a key contributor to that slump.
Only 12 per cent of small business respondents indicated that they felt Brexit would have a positive impact on their revenues, while 39 per cent said its impact would be negative from a revenue perspective.
18th January 2018 There was a sharp rise in the number of British companies facing serious financial problems during the latter months of last year as compared with the same period in 2016.
18th January 2018 A majority of British businesses would prefer to see the UK’s regulatory infrastructure align with that of the EU after the Brexit process has been undertaken.
11th January 2018 An extensive audit of Apple Europe’s UK operations by HMRC has resulted in the consumer technology giant paying an extra £137 million to the British tax authorities.
10th January 2018 The total number of retail businesses which entered into administration over the course of 2017 was 28 per cent higher than during the previous 12 months.
8th January 2018 Tens of thousands of companies across the UK could soon find themselves having to pay VAT amounts upfront to HMRC on a routine basis.
Every day we help companies just like yours turn things around against seemingly impossible odds, regardless of your situation we can help. Find your nearest office today.