The statistics released today by the Accountant in Bankruptcy show that personal insolvency levels in Scotland rose in the third quarter of this financial year compared to the second quarter, but have continued in a downward trend in comparison to last year.
Commenting on the personal insolvency figures, Paul Dounis, Restructuring Advisory partner at RSM in Scotland said:
‘Whilst the numbers of people entering into formal personal insolvency procedures and Debt Arrangement Schemes (DAS) has increased they are still significantly below last year’s figures. These increased figures suggest we are seeing the impact of oil industry job losses, including BP’s recent announcement of 4000 job losses and the future impact of TATA steel. Also, the potential for the introduction of the living wage is likely to have a significant impact the retail, hospitality and leisure sectors.
‘We are seeing more debt purchasers taking enforcement action to recover their debts in both the personal and corporate markets, which ties up with the large increase in liquidations. Business owners are also concerned about new tax changes in Scotland which could see owners of property portfolios paying more tax, and the ability of entrepreneurs to release cash from their business and take advantage of Enterprise Investment Scheme (EIS) relief hampered.
‘Many business are also struggling with late payments, impacting on cash flow at a time when HMRC are seeking to recover unpaid tax bills, cracking down on tax avoidance schemes and issuing advance Payment Notices in a number of sectors.
‘On a positive note, Scots continue to enjoy low interest rates, more pay rises and lower fuel and energy costs. Again, despite growth levels in China, any rate rises are likely to be minimal and gradual, but will still have a noticeable impact on household’s disposable income.’