Key facts
- 738,144 UK businesses were in significant financial distress in Q3.
- This is the highest level since BTG's 'red flag' report began in 2004.
- Support services, construction, and real estate sectors were most vulnerable.
- Hospitality businesses in distress rose 5% to 18,866.
- Food and drug retailers in distress rose over 7% to 19,269.
- Businesses owe £27.3 billion in tax arrears to HMRC.
The number of UK businesses facing significant financial difficulties has reached a 20-year high, intensifying pressure on the government to offer more support. According to insolvency practitioner BTG, 738,144 companies were in distress in the third quarter, a 1.6% increase year-on-year. This figure is the highest since BTG's "red flag" report began in 2004. The support services, construction, and real estate sectors are among the most affected, with hospitality and food retailers also experiencing notable increases in distress. Businesses are grappling with rising employment costs, inflation, higher energy prices, and increased borrowing costs. Additionally, UK companies owe £27.3 billion in tax arrears to HMRC.