Northern Ireland should prepare for ‘unprecedented’ number of firms going bust, Baker Tilly Mooney Moore warns

Darren Bowman

Emma Deighan Twitter Email

June 07 2021 07:39 PM

Northern Ireland should prepare itself for “an unprecedented number of business insolvencies” as Government support schemes end, an accountancy and advisory firm has said.

Belfast-based Baker Tilly Mooney Moore warned that from July 1 — the date when the UK government will gradually reintroduce some of the insolvency-related rules that had been suspended because of Covid — many businesses could face collapse.

The firm also said Northern Ireland has seen a relatively modest number of insolvency cases filed during 2020/21 so far, largely due to financial assistance provided by the Government and the Bank of England to help businesses survive the pandemic. It said these measures may have extended the life of businesses that would not have survived under normal economic conditions, thereby creating so-called ‘zombie’ companies.

According to the Department for the Economy, during the financial year 2020/2021 there was one sole trader bankruptcy and five winding up orders. That is much lower than the 345 sole trader bankruptcies and 229 company winding up orders for the financial year 2019/2020.

Darren Bowman, business recovery and insolvency partner at Baker Tilly Mooney Moore, said: “Many businesses across Northern Ireland encountered difficulties during the pandemic, accruing debt and relying on government support measures to stay solvent. These may have included the furlough scheme and derogations from usual insolvency-related rules and procedures.

“The unfortunate reality is that many of these businesses may find themselves facing insolvency, as support measures start to be withdrawn. It is essential for businesses to monitor their own performance and be aware...”

Northern Ireland should prepare for ‘unprecedented’ number of firms going bust, Baker Tilly Mooney Moore warns

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