Recession Driving Insolvency Work At Accounting Firms

Tue, 21 Jul 2009

Accountancy in the UK is booming as the longest and deepest recession in Britain since the Second World War pushes companies into insolvency .

According to figures from the UK Insolvency Service website, 6,893 companies went into liquidation, receivership or administration in England and Wales in the first quarter of 2009 up 56 per cent from the same period in 2008.

As a result, the Institute of Chartered Accountants said the UK's top four accounting firms have seen demand for insolvency services rise considerably over the last twelve months.

"Activity levels are in excess of 50 per cent up from where they were 12 to 18 months ago and debt restructuring work is up 100 per cent," commented Dan Butters, a joint administrator and reorganisation services partner at Deloitte in London .

Peter Sargent, the president of R3, a trade body representing UK insolvency practitioners, warned: "The government is predicting that the economy should start picking up later this year but that doesn't mean that the number of corporate failures will decrease."

He added that the group expects the number of corporate insolvencies to rise by 31 per cent by the end of this year.

Last week, Bank of England deputy governor Charles Bean predicted that Britain would not return to economic growth on an annual basis until the middle of 2010.
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