The cost-of-living crisis continues to impact households across the UK - but it’s not just families feeling the pressure.
Businesses of all sizes, particularly small and medium-sized enterprises (SMEs), are also being squeezed by rising costs, reduced consumer spending, and mounting debts. The result? A sharp increase in business insolvencies across the country.
In fact, according to recent statistics, insolvencies are up by 11% compared to this time last year. So, what’s going on, and how can you protect your business?
In this blog, we explore the ways in which the cost-of-living crisis is pushing more UK businesses towards insolvency, what the warning signs look like, and how McAlister & Co’s trusted insolvency services UK can help businesses either turn things around or close in a controlled, dignified way.
The Numbers Behind the Crisis
Inflation, energy bills, wage increases, higher interest rates, and falling consumer confidence have combined to create a perfect storm for UK businesses. And while some sectors - such as luxury goods or essential services - have remained relatively stable, others have been hit particularly hard.
All of these issues are symptomatic of a broader cost-of-living crisis - and they’re fuelling insolvency rates.
Warning Signs of Trouble Ahead
If your business is feeling the effects of rising costs, it’s vital to stay vigilant for signs of financial distress. The sooner you act, the more options will be available. Common warning signs of insolvency include:
- Persistent cash flow issues
- Difficulty paying staff wages, suppliers, or taxes
- Increased creditor pressure or legal actions
- Falling revenue or profit margins
- Directors personally financing the business
If any of these sound familiar, it’s time to seek professional insolvency advice. The good news is that UK businesses often have more routes to recovery than they realise - but timing is critical.
Your Options: Turning Things Around
While the cost-of-living crisis has intensified pressure on many businesses, financial difficulty doesn’t always mean the end of the road. At McAlister & Co, we specialise in working with business owners to assess the root causes of their difficulties and implement effective, realistic strategies for recovery. Our approach is both practical and compassionate, aimed at preserving viable businesses and giving directors the breathing space they need to regroup.
Business Turnaround Support
If your business has the potential to recover but is struggling due to rising operational costs, falling revenue, or poor cash flow, a tailored turnaround strategy could help you regain stability.
At McAlister & Co, we begin by carrying out a detailed financial assessment to understand what’s driving the distress. We’ll then work with you to restructure costs, renegotiate supplier terms, and explore options to access working capital.
We’ve helped countless SMEs across the UK return to stability through everything from cost-cutting to debt consolidation. Our experienced team brings clarity, objectivity, and solutions-focused thinking to even the most challenging situations.
Company Voluntary Arrangement (CVA)
If your company is viable in the long term but struggling with debt repayments in the short term, a company voluntary arrangement may be the answer. This is a legally binding agreement between your company and its creditors, allowing you to pay off your debts in affordable instalments over time while continuing to trade.
McAlister & Co manages the CVA process from start to finish. We negotiate with your creditors, prepare the proposal, and act as supervisor to ensure compliance. A CVA can halt legal action and provide a framework for recovery while retaining control of your company.
Time to Pay (TTP) Arrangements with HMRC
Falling behind on tax payments - especially during a cash flow crunch - is common in today’s climate. We can help you negotiate a Time to Pay arrangement with HMRC, enabling you to spread tax repayments over an agreed timeframe.
Using McAlister & Co’s services can improve your chances of a successful agreement, as we present a robust business case and liaise directly with HMRC to ease pressure and prevent enforcement.
Informal Repayment Plans and Advice
Sometimes a formal insolvency procedure isn’t necessary. We also support businesses through informal negotiations with suppliers, landlords, and lenders. These can result in revised payment terms, reduced interest charges, or deferred payment plans - providing some much-needed breathing room without the stress of legal proceedings.
Pre-Pack Administration
If your business model remains viable but needs a clean break from historic debt, a pre-pack administration could be the right route. This involves selling the company’s assets to a new company, often managed by the same directors, allowing the business to continue trading under a new structure.
This solution offers a way to protect jobs, retain customers, and maintain brand value. McAlister & Co handles the administration process from start to finish, ensuring compliance with all legal requirements while minimising disruption.
Your Options: Closing the Business
In some cases, despite everyone’s best efforts, the kindest and most sensible solution is to close the business. If continuing to trade is no longer viable, McAlister & Co can support you through every step of an orderly closure, protecting your legal position and helping you move forward with dignity.
Creditors’ Voluntary Liquidation (CVL)
A creditors’ voluntary liquidation is a formal process used when a company is insolvent and cannot pay its debts. Directors voluntarily initiate this process, which gives them more control than waiting for a compulsory liquidation. It allows the business to close down in an orderly way, with assets sold to repay creditors.
When you enlist the help of McAlister & Co, we will take care of everything - from notifying creditors and managing asset sales to supporting directors and staff through redundancy procedures. We ensure that your responsibilities are fulfilled and help mitigate personal risks such as wrongful trading accusations.
You Don’t Have to Go Through It Alone
Insolvency isn’t just about numbers. Behind every struggling business is a person dealing with huge emotional strain - and at McAlister & Co, we understand this.
Our role is not just to provide legal or financial solutions, but to offer reassurance, clarity, and a clear way forward. You’ll speak to real people who listen, explain your options in plain English, and guide you through every step of the journey - whether that’s recovery, restructuring, or closure.
Concerned about the future of your business during the cost-of-living crisis? Contact McAlister & Co today for confidential, expert insolvency services in the UK.