Soaring energy costs have resulted in many companies struggling to survive, especially since the recent more aggressive approach to debt collection. British Gas is one of the latest companies to apply to shut down several of its business customers this year following unpaid bills.
According to the Telegraph, thirty-seven winding-up petitions have been applied for by British Gas so far this year, of which thirteen have led to the business being liquidated. E.ON, one of British Gas’ rivals, has also issued twenty-one petitions over the same period and seven of these have led to the customer being wound up. The customers affected have generally been small businesses.
In the current economic climate, many businesses are battling to pay increased costs, and last month the government stepped in to help with subsidies. However, the current universal support will only continue until April 2023, after which it will be more targeted, leaving many companies vulnerable.
21% Annual Rise in Company Insolvencies in November
Some 2,029 registered companies in England and Wales were declared insolvent in November 2022, compared with 1,676 in November 2021. This is a 21% surge in compulsory insolvencies compared to November 2021 and a 35% rise compared to the same month three years ago.
There were also 290 compulsory liquidations in November 2022 – five times as many as in November 2021. The Insolvency Service, which publishes this data, attributed November’s increase partly to ninety-five compulsory liquidations requested by a single, unidentified bank but also to the increase in winding-up petitions presented by the HM Revenue & Customs.
Companies under particular pressure were those in the retail, hospitality and construction businesses, especially due to the impact of strike action, cold weather and reduced Christmas spending.
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