The number of businesses who filed for insolvency increased by 6.3 per cent in the first three months of 2019, according to figures produced by the Federation of Small Business (FSB).
The total number of new company insolvencies, as well as underlying total insolvencies, indicate that the UK is experiencing the highest levels of business failure since 2014.
According to the FSB, the data highlights the “immense strain” that businesses are currently under, with the market conditions being particularly perilous in “labour intensive” sectors, such as construction, administration and retail.
The group, which represents thousands of businesses across the UK, points to rising employment costs, “unfair” business rates and “significant uncertainty” as the key drivers of spiralling insolvency figures.
Late payments in the construction and manufacturing industries have also continued to plague these cash-flow dependent sectors, owing to a rise in insolvencies of 0.6 per cent in the 12 months leading up to 2019.
Encouragingly, however, there was a fall of 8.9 per cent in the number of self-employed individuals filing for bankruptcy in the final three months of 2018, although the total number remains higher than the same period last year.
Commenting on the figures, FSB national chairman Mike Cherry said: “The self-employed community, who are 4.8 million-strong, are still denied basic support in too many areas.
The FSB’s own research has found that small businesses are spending around 15 per cent more on the likes of taxes, levies and employment obligations than they were six years ago.”
Mr Cherry added: “Ongoing uncertainty is a critical issue for small firms and the self-employed, and central to this is the unknown nature of what the UK’s relationship will look like with the EU. SMEs are under the cosh more than ever and it’s time that action is now taken to prevent more businesses going insolvent in the future.”