MANY company bosses have decided they will not be able to ride out the short-term problems in the economy and are opting to close their businesses.

That is the view of an insolvency expert after official statistics showed business insolvencies more than doubling over the past year.

There were 2,114 corporate insolvencies in March – 39.4 per cent up on the previous month and 111.6 per cent up on March 2021, according to the Insolvency Service of England and Wales.

The total was 71.2 per cent higher than the figure going into the pandemic in March 2020.

Garry Lee, chair of the insolvency body R3's southern region, which covers Hampshire and Dorset, said: “The figures reflect the challenge businesses continue to face.

“The increase in corporate insolvencies in March was driven by an increase in the number of Creditors' Voluntary Liquidations (CVLs), a procedure initiated by directors of insolvent companies to close their company, which were almost 40 per cent higher than the previous month.

“This suggests that many company directors have seen the increasingly difficult short-medium term economic prospects as something they won't be able to overcome and have closed their company ahead of time.”

Personal insolvencies rose 17.2 per cent month-on-month to 11,530, which was 5.3 per cent higher than March 2021 and 47.2 per cent higher than March 2020.

The increase was driven by a rise in individual voluntary arrangements and debt relief orders (DROs).

Mr Lee, who is an associate director in the recovery and restructuring services department at the Southampton office of accountancy firm Smith & Williamson, added: “Both firms and individuals in Dorset and Hampshire have barely had time to draw breath.

“The crossover between the end of the pandemic and the increases in energy, fuel and food has hit finances hard, and the situation could become more challenging as the year goes on.

“Anyone who is worried about their finances – business or personal – in Dorset and Hampshire is urged to seek help as soon as possible from a qualified and regulated advisor.

“Talking about money worries early gives you more options, more time to take a decision about your next move and potentially a better outcome than if you’d waited until the problem had become more serious.”