For individual insolvencies, the number of bankruptcies in January 2021 was 818, while the number of Debt Relief Orders was 1,167. Both were 47% lower than in January 2020.

Overall numbers of company and individual insolvencies have remained low since the start of the first UK lockdown in March 2020, when compared with the same time period last year.

The Insolvency Service said ‘this is likely to be partly driven by government measures put in place in response to the coronavirus (COVID 19) pandemic’. Key measures include temporary restrictions on the use of statutory demands and certain winding-up petitions (leading to company compulsory liquidations), and enhanced government financial support for companies and individuals.

The overall number of registered company insolvencies in January 2021 was 50% lower than in the same month in the previous year. December 2020 was the only month since the start of the first UK lockdown in which overall registered company insolvencies were higher than in the same month of the previous year.

Colin Haig, president of insolvency and restructuring trade body R3 and head of restructuring at Azets, said: ‘January’s fall in corporate insolvency numbers has been driven by a fall in Creditors’ Voluntary Liquidations, administrations, and Company Voluntary Arrangements.

“These figures don’t reflect the fact that the economic fallout from the pandemic is continuing to hit businesses, individuals, and the wider economy. It’s clear the government’s support packages – which were extended again in December – are helping prevent the rise in insolvency numbers we would have expected to see in an economic climate like this one.

‘However, the support packages and bans on creditor enforcement actions can’t last forever. We hope that the Chancellor will use his Budget on 3 March to outline how they will be wound down in an orderly manner in the medium term, and how businesses, staff, and the self-employed will be supported during this period.’

He added: ‘It’s possible that a number of businesses entered an insolvency procedure ahead of the December rent quarter day, which would help to explain why corporate insolvencies – and more specifically administrations and creditors voluntary liquidations – increased then and fell again in January.’

In January 2021 there were 23 company insolvencies registered in Scotland, 68% lower than in January 2020. This was comprised of 12 compulsory liquidations and 11 CVLs.

On 26 June 2020, the Corporate Insolvency and Governance Act 2020 came into force, introducing measures to relieve the burden on businesses during the coronavirus pandemic. These measures include a new moratorium to give companies breathing space from their creditors while they seek a rescue, and a new Companies Act procedure, known as a restructuring plan, that allows companies to restructure unmanageable debt. These statistics provide the number of companies that have obtained a moratorium or have had a restructuring plan following the introduction of these measures.