Analysis of notices in The Gazette by Interpath Advisory reveals that a total of 11 companies based in Scotland fell into administration in Q3 2023 – up from 9 companies in Q3 2022. This represents a 22.2% increase on last year, and is further evidence that insolvency activity is now back to pre-pandemic levels following the record lows seen during 2020 and 2021.

This mirrors the picture across the whole of the UK which saw a total of 330 companies fall into administration in Q3 2023 – up from 276 companies in Q3 2022, a 19.6% increase on last year.

High profile insolvencies seen in Scotland during Q3 2023 included the administration of Le Chardon d’Or Limited, the Glasgow-based fine dining restaurant, and the administration of Recast Sports Limited, a sports streaming platform.

Alistair McAlinden

Alistair McAlinden, managing director and head of Interpath in Scotland, said: “The number of insolvencies continues to creep up, but nevertheless, remains around pre-pandemic levels.

“Indeed, if we look at the pattern of activity since the start of 2023, we’ve seen a steady and incremental uplift over the course of this year, rather than the sudden deluge many expected.

Mr McAlinden continued: “That said, in recent months there has been a noticeable shift in approach from creditors, including HMRC, lenders and landlords.

“Whilst many previously preferred forbearance and restructuring to enforcement, we are starting to see more and more action taken in the form of winding up petitions.

“If this continues, this has the potential to precipitate a larger volume of insolvencies as we move through the final quarter of the year.”

The rising number of insolvencies in Q3 2023 can be seen across a wide range of sectors, with companies operating in the retail, building and construction, professional services, and real estate industries experiencing a notable number of appointments.

Mr McAlinden said: “Q4 is the so-called ‘Golden Quarter’ for retailers, and many will be hoping that recent data around falling inflation and a pause in interest hikes will be enough to tempt shoppers to spend.

“All eyes will be on the crucial Black Friday and Cyber Monday events in November, as an early indicator for what Christmas trading might bring.”

Looking ahead to the outlook for the remainder of 2023, He concluded: “With the Chancellor ruling out the possibility of tax cuts this Autumn, wider geopolitical events, and a 2024 general election on the cards, the outlook for Scottish businesses remains uncertain.

“As cost of living pressures and sluggish economic growth are likely to continue, a combination of short-term cash visibility, and long-term planning will be critical for businesses and management teams across Scotland to ensure they remain resilient.”