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Wednesday, 21 October 2009

Begbies Traynor Forecasts "Surge in Insolvencies in 2010

A press release from Begbies Traynor plc, reported in the Evening Standard last night, says it believes corporate insolvency numbers are down because we are in the eye of the storm. It forecasts a surge in business failures in the next 12 months.

Apart from the weather analogies I largely agree with this comment. As commented here several times, 200,000 companies are currently benefiting from the time to pay scheme for PAYE and VAT. When that ends we will see a surge in liquidations, administration pre-packs and I hope company voluntary arrangements.

Increased tax enforcement with a rise in VAT, government spending cuts, tax rises and rising unemployment have yet to really get going. When these things do combine you could see a "perfect storm" for SME companies. Sorry about the weather theme!

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