Meadows & Co Celebrates 50 Years of Service
The latest data from the Insolvency Service tells a clear story of growing business failure in the UK, driven by rising costs and economic uncertainty.
In March 2026, 2,022 companies in England and Wales entered a formal insolvency process, seven per cent higher than the previous month.
In April 2026, the figure rose again to 2,085 and across the rolling 12 months to April 2026, one in 193 active companies entered insolvency.
For business owners and creditors alike, these figures are a reminder that the financial environment remains difficult and that the right action taken at the right time can make a significant difference.
If you are owed money
Unpaid invoices and late payments tie up cash that your business needs to thrive and survive. In fact, cash flow issues are one of the most common reasons for insolvency.
Acting early, before a debtor’s position deteriorates further, is critical, so you should consider:
- A formal letter before action setting out the debt and the consequences of non-payment
- Negotiating a structured repayment plan, often more realistic than insisting on a lump sum
- Issuing a statutory demand for undisputed debts above the relevant threshold
- Court proceedings to obtain a judgment, followed by enforcement action such as a charging order, attachment of earnings or a writ of control
- Petitioning for the winding-up of a company or bankruptcy of an individual where appropriate
Choosing the right step depends on the size of the debt, the financial position of the debtor and your wider commercial relationship with them.
If your business is under pressure
If your own business is struggling with debt, early action almost always produces better outcomes than waiting.
The number of options available reduces sharply as a company gets closer to formal insolvency.
Depending on circumstances, options can include negotiated payment arrangements with key creditors, refinancing, a Company Voluntary Arrangement, a moratorium under the Corporate Insolvency and Governance Act 2020, or a formal restructuring plan.
Directors also need to be mindful of their personal duties as the company’s financial position changes, particularly the duty to act in the interests of creditors as a whole once insolvency is in prospect.
Is the Government doing anything to address late payments?
The current and many previous Governments have been aware of the impact of late payments, particularly on small businesses.
In May, the Government has announced landmark legislation that will look to tackle the issue head on, including the Small Business Protections Bill, which is being introduced to Parliament to back small businesses with one of the toughest late payment regimes in the world.
The Small Business Commissioner will also be given stronger new powers to investigate and adjudicate disputes on persistent late payers with potential penalties worth tens of millions issued for non-compliance.
There will also be a new 60-day cap on payment terms for large firms, action to ban the practice of retentions in construction and mandatory interest on late payments.
These measures will take some time to implement, so businesses can’t afford to wait for change.
Don’t leave it too late
Whether you are a creditor or a business owner facing financial pressure, the common theme is the same.
Acting promptly, with proper legal advice, gives you the widest range of options and the best chance of protecting value.
Related posts
