Wylie and Bisset questions predicted October insolvencies surge

Chartered Accountants Wylie & Bisset has questioned research from insolvency and restructuring trade body R3 that a steep rise in corporate insolvencies may start as early as October and is advising business owners to plan in advance for the conclusion of government assistance schemes while there is still time to restructure their operations.

Donald McKinnon, managing partner at Wylie & Bisset, is convinced that October is too early to see a rise in insolvencies, though warns that there might well be a rise in insolvencies in March 2021 if businesses do not act now.

“Most government assistance schemes, such as furlough, capital repayment holidays and Coronavirus Business Interruption Loan Scheme (CBILS), will have expired by the first quarter of next year, when it will be time for anyone who has deferred their personal tax and VAT to pay their bills,” he said.

“We would therefore recommend that business owners seek professional turnaround and restructuring advice ahead of the first quarter of next year to prepare in advance for the conclusion of government assistance by reviewing the various options available to them rather than wait until it is too late.

“Rather than make any knee-jerk reactions to the end of furlough, we would advise business owners seek professional advice to reschedule and restructure their businesses ahead of the removal of government assistance schemes.”