The number of companies forced to close following petitions presented by creditors jumped 63% to 2,067 in 2023, up from 1,265 in 2022, according to statistics from the Royal Courts of Justice.

The number of winding up petitions rose to 70% to 4,917 in 2023, up from 2,885 the year before.

Many businesses are struggling to service their debts due to a sharp rise in interest rates over the last two years. Much of this debt was taken on during Covid.

The recent increase in winding up petitions is also being driven by HMRC working through the backlog of ‘zombie companies’. These businesses are only able to survive by failing to repay all of their debts, particularly tax debts. Creditors, particularly HMRC, are losing patience with companies that – in some cases – have failed to repay their debts for years. These creditors are now pushing to liquidate these debtors and recover.