{"id":942662,"date":"2026-10-27T11:26:13","date_gmt":"2026-10-27T11:26:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/942662\/"},"modified":"2026-10-27T11:26:13","modified_gmt":"2026-10-27T11:26:13","slug":"number-of-uk-businesses-in-financial-distress-at-two-decade-high-business","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/942662\/","title":{"rendered":"Number of UK businesses in financial distress \u2018at two-decade high\u2019 | Business"},"content":{"rendered":"

The number of UK businesses in financial distress has hit its highest level in more than two decades, as pressure grows on the chancellor to provide more support to the private sector in Wednesday\u2019s budget<\/a>.<\/p>\n

There were 738,144 businesses in \u201csignificant\u201d financial distress in the third quarter of this year, up 1.6% compared with the same period last year, according to BTG. That is the highest level since the administrator\u2019s closely watched \u201cred flag\u201d report began in 2004.<\/p>\n

The UK\u2019s support services, construction and real estate sectors were among the most vulnerable, with the highest numbers of businesses in significant distress \u2013 at 118,695, 108,340 and 99,908 respectively.<\/p>\n

The hospitality industry was hardest hit this year, with a 5% rise in the number of bars and restaurants in distress to 18,866. Struggling food and drug retailers rose by more than 7% to 19,269, according to BTG, which is one of the UK\u2019s biggest insolvency practitioners and changed its name from Begbies Traynor in February.<\/p>\n

The growing strain on UK companies comes as the chancellor, John Healey<\/a>, prepares to give his first budget on Wednesday, against an increasingly volatile backdrop as the war in the Middle East disrupts the global economy, putting pressure on public finances and reigniting the cost of living crisis.<\/p>\n

The chancellor has vowed to use the budget to provide households and businesses with more \u201cbreathing space\u201d<\/a>.<\/p>\n

Mark Fry, the chief executive of BTG, said British businesses were \u201cbattling a combination of rising employment costs, inflationary pressures, higher energy prices and elevated borrowing costs.<\/p>\n

\u201cCrucially, these pressures are not only affecting small businesses\u2019 ability to operate, but also larger businesses\u2019 ability to compete on a global stage,\u201d he said.<\/p>\n

A freedom of information request by BTG also found that British businesses still owed \u00a327.3bn in arrears to HMRC<\/a> in VAT, corporation tax and PAYE at the end of August.<\/p>\n

About \u00a324bn has been recovered since arrears reached a peak of \u00a351.3bn during the Covid pandemic, compared with a pre-pandemic total of \u00a311.4bn.<\/p>\n

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\u201cWith \u00a327.3bn owed to HMRC, high levels of recovery activity and record financial distress across the economy, many companies are approaching this budget from a position of financial weakness rather than strength,\u201d Fry said.<\/p>\n

\u201cWe hear from businesses that structural hurdles, weight of red tape, employment legislation and the tax burden alongside high interest and energy costs will need to be tackled if this is to be a budget for business.\u201d<\/p>\n

Last week the prime minister, Andy Burnham, promised that his government would \u201cslash red tape<\/a>\u201d for businesses, with plans to make compliance guidance clearer, simplify the UK\u2019s corporate reporting requirements and extend import tariff suspensions on products favoured by businesses.<\/p>\n","protected":false},"excerpt":{"rendered":"The number of UK businesses in financial distress has hit its highest level in more than two decades,…\n","protected":false},"author":2,"featured_media":942663,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-942662","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/942662","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=942662"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/942662\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/942663"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=942662"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=942662"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=942662"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}