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Rates of corporate insolvencies reach levels not seen in six years – Deloitte analysis

  • 47% increase in insolvencies year-on-year in Q1 2024
  • Only five SCARP appointments recorded in the period, compared to 33 in the entire of 2023
  • Over 800 insolvencies forecast by the end of the year

27 Mar 2024: 214 corporate insolvencies have been recorded in Ireland in Q1 2024, according to the latest Insolvency & Restructuring Statistics compiled and published by Deloitte Ireland. This represents an increase of 47% compared with Q1 2023, when 146 insolvencies were recorded. The increase has been primarily driven by Creditors’ Voluntary Liquidations (CVLs), which saw a 71% increase from the same period last year.

There have been five SCARP (Small Company Administrative Rescue Process) appointments and two Examinerships in Q1 2024 which shows a downward trend in the level of companies seeking early help. Since its introduction in 2021, there have been 60 SCARP appointments in total with a 73% success rate, saving 761 jobs.

Commenting on the latest statistics, James Anderson, Turnaround & Restructuring Partner at Deloitte Ireland said:

 “These statistics show there is an increased rate of impairment within businesses and as a consequence we are seeing a material uptake in insolvencies. We forecast that there will be in the region of 800 insolvencies in 2024, this is an increase of 200 on our 2023 forecast – where the actual number was 663. 800 would represent the highest number of insolvencies since 2017 (874) and a return to the pre-pandemic insolvency activity level. However, increased labour, insurance and energy costs will continue to be a challenge for businesses.

"The success rate of SCARP and the number of jobs being saved due to the process reaffirms its effectiveness. While this is only the first quarter of 2024, the low number of SCARP appointments so far continues to highlight that there needs to be greater awareness of the SCARP process and its benefits. We would encourage company directors and their advisors to act early to seek professional advice and examine all rescue options available.”

CVLs continue to account for the majority of insolvencies with 171 (80% of total) recorded in Q1 2024. This is a 71% increased on the same period last year. Court liquidations and SCARP & Examinership account for 3% each of total insolvencies (seven each). Compared with Q1 2023, Court Liquidations have remained the same, while SCARP & Examinership accounted for 15 this time last year. 29 Corporate Receiverships were recorded in Q1 2024 (14% of total insolvencies).

Debt warehousing and 0% interest rate

The latest reported Revenue statistics on warehoused debt at the end of January 2024 indicated the following: 

  • €1.72 billion of warehoused debt owed by over 58,000 businesses
  • Almost 70% of these businesses owe warehoused debt of less than €5,000

Businesses have until 1 May 2024, less than six weeks away, to either pay their warehoused debt in full or agree a Phased Payment Arrangement (PPA). If there is no agreed PPA in place, the entire warehoused debt is due and owing on 1 May 2024. 

A key component of a PPA is that it will likely include a minimum down payment of up 40% of the warehoused liability and agreement of same may impact tax clearances.

Commenting on the debt warehousing and 0% interest rate, Anderson, said:

"Revenue Commissioners have continued to be supportive of Irish businesses in recovering from debt accrued during the Covid-19 pandemic and further changes this year, such as the reduction of the 3% interest rate to 0% on debt, will continue to support businesses. From 5 February 2024, the 3% interest rate that was applicable for the start of period 3 (1 January 2023 or 1 May 2023 for those in the extended scheme) to the repayment date was reduced to 0%. Revenue has confirmed that it will operate the reduced interest rate on an administrative basis pending the legislative change. Revenue will also issue refunds of any interest at 3% already paid by businesses on warehoused debt."

Sector focus

Hospitality saw a 142% increase in insolvencies in Q1 2024 from Q1 2023 with an increase of 27 businesses becoming insolvent since this time last year. This also represents a 44% increase from Q4 2023. 35 of the 46 insolvencies in the hospitality sector related to restaurants and cafes. This significant increase in the hospitality sector is likely due to increased labour and energy costs, as well as an increase in the VAT rate to 13.5% and insurance costs. 

In addition, the mandatory Pension Scheme will come into operation in September of this year. These factors, together with the overall higher cost of living impacting discretionary spend, is likely to see continued distress in the hospitality industry for the remainder of 2024. 

Anderson continued: 

“One critical factor to monitor will be the impact the increased insolvency rate will have on the employment levels in the sector. Q4 2023 was the first time, since the end of pandemic, that employment in the Food & Accommodation sector surpassed pre-covid levels. The change in the employment levels in the sector will be an important barometer of performance as we progress through 2024.”

Regional focus

173 corporate insolvencies were recorded in Leinster in Q1 2024, making up 81% of insolvencies, up slightly from 78% in the same period of 2023. Munster saw 21 insolvencies (10% of total), Connaught 19 (9% of total) and there was only one insolvency in Ulster (Republic of Ireland only). 

Insolvency activity in Northern Ireland 

There were 80 Insolvencies in Northern Ireland during December 2023 to February 2024 (figures from the Insolvency Service). Insolvency-related activity amongst Northern Ireland businesses last month was twice as many as in February 2023 - with 26 corporate insolvencies registered. For the entirety of the UK the number of companies entering an insolvency process surged by 17% last month (February ‘24) when compared to February ’23. 

Catherine Doran, Turnaround & Restructuring Director for Deloitte in Northern Ireland, commented on the latest statistics:

 “The current economic environment is placing immense pressure on businesses. After a decade of interest rates hovering around zero, many businesses find themselves unprepared for this prolonged period of higher rates. This is particularly challenging for those that accumulated significant debt at low interest rates during the boom years.”

Corporate simplifications and members voluntary liquidations activity levels

There was a total of 566 Members Voluntary Liquidations (MVLs) in Q1 2024. These activity levels are more than one-third of the number of MVLs for the entire of 2023 (1,500). The majority of MVLs in Q1 2024 related to subsidiary companies, holding companies and “SPVs” (Special Purpose Vehicles) in the financial services, aviation, pharmaceutical and tech sectors. 


  • Creditors’ Voluntary Liquidation (CVLs) - a terminal insolvency procedure whereby the directors of a company instruct a Licenced Insolvency Practitioner to act as liquidator to wind up the company’s affairs because it has become insolvent and unable to continue to trade.
  • Members Voluntary Liquidations (MVLs) - a solvent means of closing a company which has come to the end of its useful life.

Further Detail on Sector Breakdown 

Within the ‘Services Sector’, Financial Services saw 26 insolvencies, representing 12% of insolvencies recorded in Q1 2024. Real Estate services reported 18 insolvencies and Technical and Professional Services companies recorded 16 insolvencies. Other areas within the Services sector were Entertainment with 10, Fitness and Beauty with 4, Health and Social Work with 3 and the remainder of the services sector being classified as ‘other services’.

Outside of the Services sector, the Construction sector recorded 18 insolvencies in the first quarter of 2024, which was in line with the 18 recorded in Q4 2023 and 21 recorded in Q1 2023.The Retail sector recorded 17 insolvencies in Q1, representing a 6% increase from Q1 2023 when 16 were recorded.

The Transport sector reported 13 insolvencies in Q1, while the Manufacturing, IT, Wholesale sectors recorded all recorded 10 insolvencies each. There were 3 insolvencies in sectors classified as ‘Other Business Activities’.