Clarke Bell Cautions that Autumn Budget Could Lead to More UK Business Liquidations

With UK insolvency rates at a 20-year high, Clarke Bell, a prominent insolvency firm, warns that the upcoming Autumn Budget may drive further businesses into financial turmoil. Set for 30th October 2024, the Budget is expected to include tax hikes and spending reductions that could trigger a wave of liquidations, especially impacting small and medium-sized enterprises (SMEs).

Currently, businesses are three times more likely to face liquidation than in pre-pandemic years, prompting Clarke Bell to urge directors to take proactive steps now, considering solutions like Creditors’ Voluntary Liquidation (CVL) or Members’ Voluntary Liquidation (MVL) before conditions worsen.

With the Autumn Budget looming, many UK businesses face rising uncertainty as operational costs, high interest rates, and inflation continue to mount. Business confidence has already decreased by 1.7% in 2024, reflecting the heightened pressures on company owners.

Fiscal measures expected from the government could add to the burden, including:

  • Changes to Capital Gains Tax (CGT) that may align it more closely with income tax and reduce relief options
  • Possible hikes in Employer National Insurance contributions, increasing business costs further

John Bell, Licensed Insolvency Practitioner, Fellow of the ICAEW, and Senior Partner at Clarke Bell, commented:

“With insolvency rates at record levels, the combination of existing financial pressures and new measures from the Autumn Budget could lead to a significant rise in business closures. Directors need to act now to explore their options.”

For solvent firms planning to close, Clarke Bell’s Members’ Voluntary Liquidation (MVL) service offers a tax-efficient method. However, potential changes to Capital Gains Tax (CGT) and Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) could increase tax burdens, making a timely MVL essential.

John Bell adds:

“Directors planning to close their solvent companies should act swiftly, particularly in light of expected changes to Capital Gains Tax and BADR. Our MVL service ensures they can extract maximum value in a tax-efficient manner before any potential tax increases are implemented.”

For companies struggling with unmanageable debt, Clarke Bell’s Creditors’ Voluntary Liquidation (CVL) service provides a structured method to close down operations, enabling directors to manage the process responsibly while protecting themselves from potential legal challenges.

John Bell explains:

“We’ve seen an increasing number of directors reaching out for advice on CVL. The process offers a solution for businesses that can no longer meet their financial obligations, helping directors close their companies in an orderly fashion.”

With the Autumn Budget imminent, Clarke Bell remains committed to providing expert support for companies navigating these challenging circumstances. Whether advising solvent businesses on efficient MVL closure or assisting distressed companies through CVL, Clarke Bell continues to offer essential guidance to directors seeking the best solutions for their unique situations.

  • bitcoinBitcoin (BTC) $ 96,885.00 0.55%
  • ethereumEthereum (ETH) $ 3,353.05 3.39%
  • tetherTether (USDT) $ 0.999172 0.11%
  • xrpXRP (XRP) $ 2.24 1.62%
  • bnbBNB (BNB) $ 664.24 2.8%
  • solanaSolana (SOL) $ 182.90 6.15%
  • usd-coinUSDC (USDC) $ 0.999138 0.13%
  • staked-etherLido Staked Ether (STETH) $ 3,347.96 3.46%
  • cardanoCardano (ADA) $ 0.900460 5%
  • tronTRON (TRX) $ 0.245568 1.3%
  • avalanche-2Avalanche (AVAX) $ 37.41 5.84%
  • the-open-networkToncoin (TON) $ 5.32 3.63%