Deloitte says business bankruptcies will rise by a third this month compared to the first nine months of 2022

The number of companies going insolvent will increase by a third by the end of this month compared to the first nine months of 2022, according to forecasts from accounting giant Deloitte.

The growing scale of financial hardship has already triggered a surge in the use of the Small Business Administrative Rescue Process (Scarp), the new examiner-style rescue program for businesses at risk of bankruptcy.

Recent high-profile cases of companies using Scarp include the companies behind chef Dylan McGrath’s Rustic Stone and Brasserie Sixty6 restaurants, both of which have appointed Neil Hughes of the Baker Tilly accounting group as an advisor for the process that can enable companies to negotiate through difficulties and emerge with reduced debts.

In the broader economy, rising levels of financial distress reflect rising inflation, interest rate hikes and soaring energy costs, all of which are expected to continue to put pressure on businesses. .


The services sector is expected to account for the highest proportion of insolvencies.

Deloitte said the total number of business insolvencies forecast in Ireland for the first three quarters of 2022 is 378. This is almost a third more than the 278 insolvencies recorded in the first nine months of 2021 which had included the end of the Covid pandemic and final shaking off lockdowns.

Insolvency experts have long predicted a delayed wave of Covid-related insolvencies at the end of 2022, as the benefits of government supports, tax warehousing and loan repayment interruptions have all been delivered during the shutdowns.

It’s happening, according to David Van Dessel, partner financial advisor at Deloitte.

“Based on current levels and trends in insolvency activity, it now appears that the previously predicted wave of insolvencies is becoming a reality,” he said.

Interest will begin to accrue on most of the 2.8 billion euros of debt “stored” by Revenue from next January 1, he added.

A new factor that had not been a feature at the end of the pandemic is the squeeze on household finances – which should translate into reduced spending, he said.

“Consumers hit by inflation and interest rate hikes may also reduce discretionary spending, further exacerbating downward economic pressures,” Van Dessel said.

Companies that are already struggling should consider their options as soon as possible because early action is a key factor for successful turnarounds, he said.