Richard Oddy, Restructuring and Insolvency partner at international accountancy and business advisory group Azets, said: “April’s corporate insolvency numbers have been driven by a combination of geopolitical issues, legislative changes that will increase pressure on margins, ongoing cost challenges and customer caution, and creditors continuing to take an assertive attitude towards chasing down debts as they attempt to keep their own balance sheets in the black.

“Numbers have continued to rise this month, and the wider trend shows a rise in compulsory liquidations since January 2025 and a sharp rise compared to last month – a sign that creditors are resorting to the courts to recover what they’re owed. HMRC is leading the way on this in an attempt to recover funds for the public purse, and private sector creditors are following their lead so they can pay their own bills and settle their own debts.

“Creditors’ Voluntary Liquidations increased month on month as directors continued to shut the doors after running out of time, energy and options after years of tough trading conditions and in a market where many creditors lack the financial flexibility to overlook or negotiate on monies owed.

“Administrations fell compared to last month but were still at their second highest level since August 2023, which is a sign that there are still a reasonable number of firms for whom rescue is a potential option, and perhaps that some directors are seeking advice at an earlier stage than they have previously.

“The economic fallout of the war in Iran remains a key concern for many directors. Businesses are struggling with the further increase in costs the conflict has caused and are seeking advice about how to manage this in increasing numbers, while the ripple effect of the War has made finance less available and affordable, and restructuring work even more challenging.

“Closer to home, the introduction of new business rates and changes to the minimum wage may be the final straw for many firms who were keeping their heads above water, and while we don’t expect to see these translate into increased corporate insolvency numbers until the summer, they are likely to be another reason many firms are seeking advice now.

“The Bank of England’s decision to freeze the rate of interest will mean little relief for businesses when it comes to costs and access to finance – and has happened alongside with rising inflation and a seemingly unending period where expenses increased.

“There seems to be no break for businesses at the moment – trading conditions have been tough for a long time, and doesn’t show any signs of improving, and the instability at the top of Government over the last fortnight will affect clients, suppliers and finance, all of which will make the business climate more turbulent and make it harder for firms to stay profitable.

“From a sector perspective, the construction industry continues to grapple with rising costs and wages, payment issues and the ongoing impact of the Iran War on the price of materials. In an industry where tight margins and cashflow challenges are a way of life, this puts a further strain on businesses, many of whom have been battling rising expenses since 2020.

“Retail and hospitality firms have also been hit hard by the ongoing increases in costs and cutbacks in consumer spending. Households are keeping a sharp eye on their finances and the price increases many hospitality firms have had to introduce are too much at a time when their customers are only spending money on the essentials. Coming off the back of a Golden Quarter which had lost its lustre, this year is proving to be another tough one for both sectors – and has seen a number of established firms announcing site closures and restructurings as they attempt to stay solvent.

“Any directors who are worried about their business or its finances should seek advice as soon as possible. We know how difficult is to talk about your worries about your business, but having that conversation while they’re at an early stage gives you more options, more time and a greater chance of improving your situation compared to if you’d waited until the problem became more serious.”