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Business insolvencies fall in Scotland

Category: Scottish Economy — Paul Morgan on November 8, 2012

Fewer Scottish businesses are going to the wall, the latest official figures have revealed, though many commentators have warned against outright optimism.

The figures, released for the last quarter, have shown that 282 companies went into insolvency over the time period. The Insolvency Service has said this is the lowest quarterly number since Q2 2011.

The news was welcomed by PwC, who said the news was indication that the tide of insolvencies in the country was receding. However, the head of business recovery at the accountancy firm said the news should be met with caution:

“While this is a welcome back drop for our recovery out of recession, we have to be mindful that there is still pressure and distress out there for some, and as a result we may still see some casualties over the coming months.”

Such sentiments were echoed by PKF. The firm’s corporate recovery partner Bryan Jackson said:

“We can see that the situation in the economy is not improving greatly.”

Citing the recent failure of electrical retailer Comet, Jackson highlighted that any improvements had to be countered by the recent record levels of corporate failures.

Though many companies have failed in recent years, many have also taken advantage of the situation. By using such facilities as invoice factoring for example, many firms have funded acquisitions.

Furthermore, other firms have been able to continue trading with the help of factoring and invoice discounting.

Future results, compiled from records at Companies House, will be closely monitored to see how sustained the recovery from administration is.

'Disclaimer: The information contained in these articles is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.

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