The number of Scottish companies entering formal insolvency fell to 83 in July, 28% fewer than in the same month of 2025, according to figures published on 18 August by the Insolvency Service.
Creditors’ voluntary liquidations, where directors decide to wind a company up rather than wait for a creditor to force the issue, accounted for 46 of the total. There were 31 compulsory liquidations and six administrations, and no company voluntary arrangements or receivership appointments at all.
The monthly Scottish numbers are volatile and are not seasonally adjusted, so the twelve-month rate is the better guide. On that measure 49.4 in every 10,000 companies on the Scottish register entered insolvency in the year to July, down from 51.3 a year earlier. That now puts Scotland marginally below England and Wales, where the equivalent rate was 50.3, or one company in 199. English and Welsh insolvencies fell 5% year on year in July, a much shallower decline than Scotland’s.
The quarterly data from the Accountant in Bankruptcy points the same way. There were 240 corporate insolvencies in the three months to June, against 332 in the same quarter of 2025, a fall of 27.7%. Compulsory liquidations dropped from 167 to 97. Members’ voluntary liquidations, which are used to close solvent companies and are not a distress signal, rose from 119 to 127.
Insolvency practitioners have been careful not to read the decline as a recovery. Commenting on the quarterly figures in July, Blair Milne, a Glasgow-based corporate insolvency partner at Azets, said it “would be wrong to interpret the figures as evidence that the challenges facing Scottish businesses have eased” and that activity “remains elevated by historic standards”. He pointed to employer National Insurance increases and National Living Wage rises as continuing pressures on labour-intensive sectors including hospitality, retail, manufacturing, construction and social care.
Two other datasets complicate the picture. Personal insolvencies in Scotland went up while corporate ones came down: the Accountant in Bankruptcy recorded 2,181 bankruptcies and protected trust deeds in the April to June quarter, 248 more than a year earlier, an increase of 12.8%.
And across the UK, company formation is slowing alongside company failure. R3’s quarterly business health report, which uses Creditsafe data, counted 184,873 new UK companies registered in the second quarter, down 6% on the same period of 2025 — the same rate of decline it recorded in insolvency-related activity. Sonia Jordan, the trade body’s president, said the fall in new company formation suggested “many would-be entrepreneurs are taking a wait-and-see approach”.
