The total insolvencies included 30 compulsory liquidations, 52 Creditors’ Voluntary Liquidations (CVLs), and five administrations, with no recorded instances of receivership appointments or Company Voluntary Arrangements (CVAs).

The trend of insolvencies has seen a notable shift. Prior to the pandemic, compulsory liquidations were the primary driver behind company insolvencies in Scotland. However, during the pandemic, the numbers skewed heavily towards CVLs, registering approximately three times more than compulsory liquidations.

This trend persisted into the first nine months of 2023, with CVLs remaining over 1.5 times higher than compulsory liquidations.

Notably, between 26 June 2020 and 30 September 2023, not a single moratorium was obtained in Scotland, and only two companies had a restructuring plan registered at Companies House, as introduced by the Corporate Insolvency and Governance Act 2020.

Michelle Elliot

Michelle Elliot, restructuring advisory partner at FRP, said: “Positive economic developments have been few and far between in recent months, so September’s fall in insolvencies will be a welcome sign for struggling businesses.

“Speculation that inflation has peaked will also be appreciated, especially by the retail and manufacturing sectors which can both expect to see a surge in demand. Indeed, our own analysis suggests that 96% of Scottish manufacturers are confident in their ability to trade through the next 12 months – well above the national average of 87%, and a marked increase compared to this time last year.

“However, this optimism must be met with a degree of realism. The high energy costs that have characterised the past 18 months remain sticky, so the energy-intensive winter months will likely be the catalyst for further insolvencies.”