A business can be busy and still be under pressure. You may have work coming in, regular customers, staff to look after and suppliers who rely on you. Yet the cash may still not stretch far enough.
That is the difficult reality for many firms in 2026. Official data shows that construction, wholesale and retail, and accommodation and food service remain the largest insolvency sectors. For many business owners, the key question is now simple but serious: is the business still viable, or would a controlled closure be safer?
What Insolvency Data Tells Us
The latest company insolvency statistics show that there were 2,085 registered company insolvencies in England and Wales in April 2026. That was 2% higher than March 2026 and 3% up on April 2025.
Of those April insolvencies, 1,510 were creditors’ voluntary liquidations, often called CVLs. A CVL is a formal process used to close an insolvent limited company when it cannot pay its debts.
The wider 12-month picture is just as important. Between 1 May 2025 and 30 April 2026, 1 in 193 companies on the Companies House effective register entered insolvency. That is a rate of 51.8 per 10,000 companies.
The sector data also shows where the strain is greatest. In the 12 months to March 2026, the three sectors with the highest number of insolvencies were:
- Construction, with 3,851 insolvencies
- Wholesale and retail trade, including repair of motor vehicles and motorcycles, with 3,652 insolvencies
- Accommodation and food service activities, with 3,304 insolvencies
These numbers do not mean every business in these sectors will fail. They do show that if you are running a business under pressure, you are not alone.
If you are trying to understand where your situation fits within the wider picture of UK insolvency, early advice can help you see your options clearly.
Why Are These Sectors Feeling the Strain?
There is rarely one single cause of business distress. More often, it is a build-up of pressure over time.
A profitable job is delayed. A large customer pays late. VAT becomes due before cash arrives. Rent, wages, finance payments and supplier bills still need paying. Before long, the business is not just having a difficult month. It is relying on next month’s income to cover last month’s debts.
Separate Q1 2026 distress data from BTG’s Red Flag Alert also shows severe pressure across the wider economy. It reported that UK businesses in critical financial distress rose 36.9% year on year to 62,193. Significant financial distress rose 9.6% to 634,867 firms.
That matters because distress often appears before formal insolvency. It is the warning stage. It is the point where decisions still matter.
If your business is under pressure, you don’t have to go through it alone. Contact Anderson Brookes by calling 0800 1804 935 or emailing advice@andersonbrookes.co.uk.
Construction: Late Payments, Margins and Project Risk
Construction businesses often work with tight margins and long payment chains.
You may need to pay labour, materials, plant hire and subcontractors before you receive full payment yourself. If a project is delayed, disputed or underpriced, cash can disappear quickly. Fixed-price work can also become dangerous when material costs or labour costs rise after a quote has been accepted.
For subcontractors, the risk can be even sharper. If a main contractor is insolvent, payments may stop with little warning. Retentions may be at risk. Work already completed may be unpaid. You may then be left with your own suppliers, staff and tax liabilities to deal with.
This is why construction insolvency advice should not be left until a winding-up petition arrives. If you are relying on one overdue payment to keep the whole business going, it is time to take advice.
Free Download: Construction Sector Distress Report
Construction continues to see more company insolvencies than any other UK sector, with fixed-price contracts, late payment, retention risk and labour pressures still causing serious problems for SME firms. This free Anderson Brookes report sets out the structural risks, the current warning signs, and the practical options available to directors facing financial pressure. Enter your details to get your copy.
Retail: Cash Can Fall Short Even as Sales Rise
Retail can be misleading. A shop can have customers. An online store can have orders. Revenue can look steady. Yet the business may still be losing money once rent, staff, stock, utilities, delivery costs, returns, finance and tax are taken into account.
Many retailers also have money tied up in stock. That stock may not convert into cash quickly enough. Discounting can bring money in, but it can also reduce margins further. If rent or supplier arrears are already building, more sales do not always solve the problem.
This is where retail insolvency advice can be useful. The issue is not just whether the business is trading. It is whether the trading is producing enough cash to meet debts as they fall due.
Free Download: Retail Sector Distress Report
Retail businesses are under pressure from every direction: weaker footfall, rising labour costs, higher rates, online competition and tighter margins. This free Anderson Brookes report explains why distress is growing across the sector, what warning signs directors should watch for, and what options are available when the pressure starts to build. Complete the form to get your copy.
Hospitality: High Fixed Costs and Fragile Cash Flow
Hospitality businesses often face pressure from several directions at once.
Food, drink, wages, energy, rent and business rates all need to be paid. Some costs rise even when customer numbers fall. Quiet trading periods can quickly create arrears that are difficult to recover from later.
The Low Pay Commission confirmed that from 1 April 2026 the National Living Wage for those aged 21 and over rose to £12.71, a 4.1% increase. For many labour-intensive businesses, including restaurants, hotels and pubs, even necessary wage increases can add to existing cash flow strain.
If you are dealing with hospitality insolvency, the timing of advice matters. Waiting for the next busy period may feel natural, but it is not always safe if debts are already unmanageable.
Pubs face their own pressures too. Rent, beer supply agreements, staffing, utilities and quieter weekday trading can all create a difficult mix. If your pub cannot meet its bills and there is no realistic route back to profit, pub liquidation may need to be considered as part of a controlled plan.
Free Download: Hospitality Sector Distress Report
Hospitality operators are still dealing with the combined impact of rising wages, rates, energy costs, lease pressures and weaker consumer spending. This free Anderson Brookes report explains why distress remains high across pubs, restaurants, cafés and hotels, what signs suggest the business may be at risk, and what directors can do next. Fill in the form to download your copy.
Why Your Business Might Be Busy but Not Viable
A viable business is one that has a realistic chance of paying its debts and returning to stable trading.
It does not need to be perfect. It may still have arrears. It may need support, time and a firm plan. But there must be a credible route forward.
Your business may still be viable if:
- current work is profitable
- customers are still paying reliably
- cash flow can be forecast with some confidence
- arrears are not increasing every month
- creditors are willing to engage
- the business can meet new bills as they fall due
The position may be more serious if:
- HMRC arrears keep growing
- suppliers are being paid late as standard
- rent, wages or VAT are regularly missed
- new work creates more losses
- personal funds are being used to cover company debts
- creditor threats are becoming more frequent
- there is no realistic plan beyond waiting for trade to improve
Many good businesses reach this point because pressure has built up over months or years. The important thing is to pause and look at the position clearly.
Why Getting Early Advice Matters
When a company may be insolvent, decisions become more sensitive.
Insolvency usually means one of two things. The company cannot pay its debts when they are due, or its debts are greater than its assets. If either may apply, directors need to be careful about what happens next.
You may need to think about:
- whether it is safe to keep trading
- whether new credit should be taken
- which creditors are being paid
- whether company money is being used properly
- whether continuing to trade could make creditor losses worse
A licensed insolvency practitioner can review the position and explain the options. That does not automatically mean liquidation. It means you get regulated advice before the situation becomes harder to control.
At Anderson Brookes, we speak to business owners who are worried, tired and unsure what to do next. Our role is to give clear advice, not judgment.
When Recovery May Be Possible
Not every business under pressure needs to close. Sometimes the right step is to reduce costs, negotiate with creditors or restructure how the business operates. In some cases, the core business is still sound, but historic debt is holding it back.
Recovery may be possible where there is still a profitable trade underneath the pressure. For example, you may have strong customer demand but poor payment terms. You may have one loss-making contract that needs to end. You may need to deal with HMRC before arrears become unmanageable.
A recovery plan should be realistic. It should be based on actual cash flow, not hope.
Helpful questions include:
- What debts are overdue today?
- What must be paid in the next 30 days?
- Which jobs, sites, products or services make money?
- Which ones drain cash?
- Are creditors still willing to agree time to pay?
- Can the business meet future tax, rent and wage costs?
If the answers show a workable route forward, early advice can help you take control.
When to Consider Closure
Sometimes the safer option is to close the company in an orderly way.
A CVL is a formal liquidation process for an insolvent limited company. It is usually started by the directors and shareholders when the company cannot pay its debts.
A CVL can help bring structure to a difficult situation. It can stop the company from taking on more debt. It can reduce pressure from creditors. It also places the process in the hands of a licensed insolvency practitioner.
This can be safer than waiting for creditors to force the issue through compulsory liquidation. Waiting too long can reduce your options and increase stress.
A controlled closure may be worth considering if:
- the company cannot pay HMRC, suppliers, rent or loans
- creditor action is escalating
- there is no realistic return to profit
- cash flow is getting worse, not better
- you are using personal money to keep the company afloat
- continuing to trade may increase losses
Closing a company is a serious decision. But in some cases, it is also the most responsible one.
Common Worries Directors Have
Does insolvency mean I have failed?
No. Insolvency means the company cannot meet its financial obligations. It does not mean you acted wrongly. Many businesses become insolvent because of late
Can I keep trading while I decide what to do?
Sometimes, but you need advice. If the company is insolvent or close to insolvency, continuing to trade can create risk if it increases creditor losses.
Will I be personally liable for company debts?
A limited company is usually separate from you personally. However, personal guarantees, overdrawn director loan accounts, certain tax issues or wrongful trading concerns can change the position. You should take advice before making assumptions.
What happens to HMRC debt?
HMRC is a creditor of the company. Tax arrears can be included in a formal insolvency process. If the business may still be viable, it may be possible to explore a payment arrangement. If not, liquidation may be the more realistic route.
Can I start again after liquidation?
In many cases, directors can be involved in another business after liquidation. There are rules around company names, assets, conduct and reuse of trading styles, so advice is important before you take any next step.
Should I wait and see if things improve?
Waiting can feel safer, but it can make things worse. If creditor pressure is building, early advice gives you more control.
Next Steps: Checklist
If your business is under pressure, start with the facts.
- Write down what is owed, who it is owed to and when it became due. Include HMRC, rent, suppliers, finance, loans, wages and any personal guarantees.
- Then look at what is due next. A 30-day cash flow review can be more useful than a long forecast if the immediate pressure is severe.
- You should also stop and review any work that loses money. Taking on more turnover does not help if each sale or contract increases the shortfall.
- Avoid making large or unusual payments to one creditor without advice. If the company is insolvent, the order and reason for payments can matter.
- Most importantly, speak to a regulated adviser before the pressure becomes a crisis.
Don’t Let Pressure Become a Crisis
If your business is under pressure, you do not have to work it out alone.
You may still have options to rescue the company, restructure debts or deal with creditors. You may also find that a controlled closure is the safest and most responsible route. The right answer depends on your company’s position, cash flow, debts and prospects.
Anderson Brookes can help you understand those options clearly. We will explain what is possible, what is risky and what steps you can take next.
Speak to Anderson Brookes for confidential, regulated insolvency advice before creditor pressure, HMRC arrears or cash flow problems become harder to manage. Call us on 0800 1804 935, or email us at advice@andersonbrookes.co.uk.