Since the original publication of this article in April, the insolvency landscape has worsened significantly. September 2025 saw some 2,000 corporate insolvencies in England and Wales, the highest monthly figure in over 30 years. This sharp rise reflects the cumulative impact of rising labour costs, persistent inflation, and weakening consumer confidence.
With the Autumn 2025 Budget approaching, many directors fear that further fiscal tightening could accelerate the trend. Sectors already under pressure, such as hospitality and retail, may be particularly vulnerable to any measures that increase operating costs or suppress demand.
This reinforces the importance of early intervention. For directors concerned about financial viability, seeking advice from Licensed Insolvency Practitioners is not just prudent- it may be essential.
Original Article: Business closures surge in Q1 2025: A sector snapshot for company directors and how Insolvency Practitioners can help
(Published 17th April 2025)
The first quarter of 2025 has seen a dramatic surge in business closures across the UK, with 2,718 companies shutting their doors between January and March. This marks the highest first-quarter total since 2021 and reflects the mounting pressures faced by businesses in an increasingly challenging economic environment. The surge follows the implementation of Chancellor Rachel Reeves’s £40 billion package of tax increases, including a £25 billion increase in employers’ National Insurance contributions, which have gone live from 6th April 2025. These measures have been widely criticised for their impact on business viability, with Mel Stride, the Shadow Chancellor, describing the fiscal package as “anti-business”.
The British Chambers of Commerce (BCC) has warned that the tax hike is becoming a “toxic reality” for businesses, driving up costs and hitting income. A poll conducted by the BCC revealed that fewer than half of firms expect turnover to increase in the next 12 months, with many scaling down investment plans. Rising costs, coupled with reduced profits, have left businesses struggling to stay afloat, with some forced to cut hiring or make redundancies.
Adding to the economic strain, the ongoing global trade war and US import tariffs introduced by Donald Trump are expected to inflict a “material hit” on the UK economy. These tariffs are forecast to reduce economic growth by 0.8% over the next two years, leaving Britain £21.6 billion worse off by 2027.
In this article, we look at 3 specific sectors and comment on how they are performing amidst this difficult and uncertain backdrop, before looking at how Insolvency Practitioners can help businesses in financial difficulty.
Sector-Specific Challenges: Retail, Pubs, and Services
While the overall picture is bleak, the challenges vary across sectors. Here is a closer look at three key industry sectors:
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Retail Sector – over 13,000 High Street shops closed in 2024, with more to come in 2025
The retail sector has been hit hard by rising operating costs, with businesses facing a forecasted £5.6 billion surge in expenses following the tax hikes, according to a report by Yoobic, the Retail Economics and industry specialist. Many retailers are struggling to absorb these costs, leading to on-going store closures and reduced investment.
During 2024, over 13,000 high street shops closed, an increase of 28% on 2023 and an average of 37 closures per day.
Most of the closures were independents, but large chains also closed, including Ted Baker, Homebase and Carpetright. It is estimated that c.170,000 retail workers lost their jobs due to store closures in 2024.
The Centre for Retail Research predicts worse to come in 2025, with an estimate of 17,350 closures.
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Pubs – number of pubs falls below 39,000 in England and Wales for the first time
The pub industry continues to grapple with long-term decline, exacerbated by recent fiscal measures. Over 400 pubs closed in England and Wales in 2024, with the number of establishments in England and Wales falling below 39,000 for the first time. The average number of closures per month was over 34, the fastest fall in numbers since 2021 during the Covid pandemic. Rising National Insurance contributions, increased wages, and reduced business rate relief in 2025 will further strain the sector.
Publicans are demanding meaningful reforms to support the industry, with Emma McClarkin, the Chief Executive of the British Beer and Pub Association, calling for the Government to:
“…..swiftly deliver permanent and meaningful business rate reforms”.
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Services Sector – some better news
The services sector has shown some resilience, emerging as a “driving force” behind recent growth. Research by BDO highlights the sector’s contribution to economic output, with technology and financial services leading the way. As a result, the BDO Index has so far recorded a one point increase in services output this year to 97.75, where any figure above 95 is positive.
However, challenges persist, with many firms scaling down hiring plans and grappling with higher costs as in all other sectors. Despite these hurdles, the sector’s adaptability and innovation offer hope for continued growth, depending on how the current tariff war pans out.
How Insolvency Practitioners Can Help
For businesses facing financial difficulties, Insolvency Practitioners can play an important role in navigating the complexities of insolvency and finding viable solutions. Here is a summary of how we can assist:
- Debt Management and Restructuring: Insolvency Practitioners can negotiate with creditors to restructure debt and create manageable repayment plans.
- Business Rescue Procedures: They can explore options such as Company Voluntary Arrangements (CVAs) to help businesses continue trading while addressing financial challenges.
- Liquidation and Closure: When recovery is not possible, Insolvency Practitioners ensure that businesses are closed in a compliant and efficient manner, minimising legal and financial risks, using a Creditor’ Voluntary Liquidation.
- Strategic Advice: By analysing a company’s financial position, Insolvency Practitioners provide tailored advice to help directors make informed decisions.
In these uncertain times, seeking professional advice from Insolvency Practitioners at the earliest opportunity has become more important than ever, and can make all the difference. Whether it is restructuring debt, negotiating with creditors, or exploring rescue options, Insolvency Practitioners offer the expertise and support needed to navigate financial challenges and help safeguard the future of businesses.
Fair point, Craig. That “styled for web” version was overengineered for what you likely meant—clean, readable formatting suitable for online use, not embedded HTML. Here’s a simplified version of the FAQ section, formatted for clarity and direct use beneath your article on the Antony Batty site:
Frequently Asked Questions
1. What are the most common causes of business insolvency in 2025?
Rising labour costs, persistent inflation, reduced consumer confidence and increased tax burdens. Employers’ National Insurance hikes have been especially impactful.
2. How do I know if my company is at risk of insolvency?
Warning signs include mounting debts, cash flow pressure, inability to meet tax obligations and declining profitability. If you’re struggling to pay creditors or HMRC, it’s time to seek advice.
3. What options are available to rescue a struggling business?
Company Voluntary Arrangements (CVAs), debt restructuring and time-to-pay arrangements with HMRC are common rescue tools. These can help viable businesses continue trading while addressing financial issues.
4. What happens if my company needs to close?
A Creditors’ Voluntary Liquidation (CVL) allows directors to close a company in an orderly, compliant way. It ensures legal obligations are met and minimises personal risk.
5. When should I speak to an Insolvency Practitioner?
The earlier, the better. Engaging a licensed Insolvency Practitioner before a crisis point can open up more options and reduce the risk of wrongful trading or personal liability.
