- Corporate insolvency numbers (liquidations and receiverships) in Scotland for Q1 2025-2026 increased by 17.3% compared with Q1 2024-2025, to a total of 332.
- The number of corporate insolvencies (liquidations and receiverships) in Scotland for Q1 2025-2026 increased by 12.9% compared with the previous quarter’s total of 294 (January-March 2025).
- Personal insolvency numbers (bankruptcies and protected trust deeds) in Scotland for Q1 2025-2026 decreased by 5.8% compared with Q1 2024-2025, to a total of 1,935.
- The number of personal insolvencies (bankruptcies and protected trust deeds) in Scotland for Q1 2025-2026 increased by 15.8% compared with the previous quarter’s total of 1,671 (January-March 2025).
Commenting on the Scottish insolvency statistics, Q1 2025-2026 (1 April 2024 to 30 June 2025), Tim Cooper, Immediate Past President of restructuring, turnaround and insolvency trade body R3 and Partner at Addleshaw Goddard LLP, said:
“Corporate insolvency activity in Scotland is picking up pace, with more firms entering an insolvency process last quarter than at any point in the past two years. This upward trend stands in contrast to England and Wales, where corporate insolvency numbers increased only slightly on the quarter and fell year-on-year. The more significant rise and overall upward trend in Scotland has been driven largely by a significant increase in Compulsory Liquidations, which have reached their highest level in six years, a high proportion of which are driven by HMRC, indicating a more robust approach to tax debt collection and enforcement, and other creditors adopting a similar and more active approach through the courts.
“In contrast, Creditors’ Voluntary Liquidations have dipped slightly compared to both the previous quarter and the same period in 2024. This all paints a picture in the Scottish economy of businesses struggling with liquidity to pay creditors as they fall due, with creditors including HMRC taking proactive court action to enforce payment or bring businesses to a close and prevent further losses. Conversely, from a voluntary liquidation perspective, there may be hesitation among directors to take decisive steps in the current climate, or that they are able to find other avenues towards rescue and recovery including creditor support and forbearance which avoids an insolvency or otherwise enables a solvent closure. That said, Members’ Voluntary Liquidations remain above last year’s level but have fallen from the heightened numbers seen in late 2024 and early 2025, when many directors accelerated closures to benefit from the lower Business Asset Disposal Relief rates ahead of planned tax increases.
“There are indications that momentum in Scotland’s economy is stalling, and these latest figures indicate more businesses in Scotland are paying the price. Amid high operating costs, low confidence, and persistent inflation, many firms are facing tough choices around whether to keep trading, let alone grow. Rising costs from the National Minimum Wage and employers’ National Insurance contributions at the start of this quarter, combined with concerns over potential autumn tax hikes and tariffs, are clouding decision-making and forcing many firms into a holding pattern as they wait for greater certainty.
“Hospitality and retail businesses remain under significant pressure. After a period of relative resilience, activity in both sectors is starting to dip as fewer people are dining out, travelling midweek or spending on non-essentials. For smaller venues and high street shops outside of major cities, this shift is being felt more sharply as margins shrink and footfall fluctuates. Scotland’s capital is seeing a stronger performance, but this is not the picture everywhere and for many firms, stability still feels out of reach.
“Looking ahead, the summer calendar of major events like the Edinburgh Fringe may bring a welcome, if temporary, boost to some consumer-facing businesses, but the wider backdrop remains challenging. While there are moments of optimism, recovery is fragile, and for some, the pressure is proving too much.
“Turning to personal insolvencies, numbers in Scotland have risen sharply since the start of the year, with a steeper quarterly increase than in England and Wales, which may indicate worsening financial distress for many Scottish households. Both Bankruptcies and Protected Trust Deeds have contributed to this rise, with bankruptcies increasing particularly sharply. This suggests that informal debt solutions are becoming insufficient for some, leading more individuals to turn to bankruptcy as a last resort.
“Compared to the same period last year, however, overall personal insolvency numbers in Scotland have fallen slightly, reflecting a modest drop in both types of process. But the year-on-year change is less marked for bankruptcies, which remain close to 2024 levels – pointing to a longer-term trend of persistent financial strain.
“For many households across Scotland, the financial pressures introduced this spring have hit hard and fast. Although unemployment has recently fallen, bucking the wider UK trend, this has yet to ease the burden felt by many families facing rising living costs. In April, widespread increases across every essential bill dealt a severe blow to budgets already stretched to the limit. These are costs people simply cannot avoid or reduce, leaving many with nowhere left to cut back. There is growing concern that, as people struggle to cover these rising essentials, some may be forced to rely on credit to pay for basics such as food and fuel.
“The removal of the Scottish rent cap in March has added fresh pressure on renters across the country. With landlords now able to raise rents more freely, many tenants are facing increased housing costs just as budgets are tightening. Meanwhile, homeowners continue to struggle with rising mortgage repayments driven by persistently high interest rates, further squeezing household finances.
“Our advice to anyone concerned about their personal or business finances is to seek help early – ideally as soon as those concerns start to arise. It can be difficult to talk about financial pressure, but the earlier you reach out, the more options you are likely to have and the more time you will have to consider them.”
