The number of companies going bust across the UK increased last month after firms swallowed increased costs, according to figures.
Official data from the Insolvency Service showed there were 2,238 company insolvencies in England and Wales in May.
This was 8% jump compared with April, and 15% higher than the same month last year.
The increase was driven by 1,734 creditors’ voluntary liquidations, where company directors choose to shut a business down.
There were also 354 compulsory liquidations, although this was 7% lower than the 10-year high reported in April.
The Government body also recorded 136 company administrations and 14 company voluntary arrangements (CVAs).
The rise in insolvencies comes after firms were hit by fresh tax increases in April, such as increased national insurance payments, as well as the rise in the national minimum wage.
Mark Ford, partner in S&W’s restructuring and recovery team, said: “Businesses are now facing newer challenges that threaten their viability and this means we are likely to continue to see a steady stream of company insolvencies in the coming months.
“Higher costs resulting from increases to employer national insurance contributions, the minimum wage and business rates are all heaping considerable pressure on businesses, particularly those that feel they are unable to increase prices for fear of losing customers.”
David Kelly, head of insolvency at PwC, said: “The data reflects the persistent challenges, particularly in the construction and manufacturing sectors, and highlights that the financing position of many businesses remains fragile.
“This vulnerability can also be seen in some of the business and consumer sentiment surveys which are painting a very cautious picture.”
Separate figures from the Insolvency Service showed that the number of personal insolvencies rose 5% year-on-year in May.
