SELF-employed people on the Fylde coast are now facing the brunt of the region’s economic difficulties, according to a new report.
Blackpool-based insolvency expert Adcroft Hilton’s summer 2011 analysis says rising numbers of sole traders and self-employed business owners are facing bankruptcy or seeking personal insolvency solutions.
It also warns that a more “hardline” government approach to tax and VAT matters is likely to add to the number of business failures in the region over the next 12 months. The report forecasts that the impact of the clampdown by HMRC could increase the number of businesses that fold by as much as 10 per cent.
Adcroft Hilton says bankruptcy orders for the self-employed have shown, “a worryingly large increase”.
Figures show the proportion of bankruptcy orders for sole traders and the self-employed has increased from 13 per cent in Quarter 4 2009 to 18.9 per cent in Quarter 4 2010.
In the first quarter of 2011, 28 companies were wound up in the Fylde, Lancashire and Cumbria, with 114 creditors bankruptcies and 409 debtors bankruptcies.The report warns small businesses in the region are also being squeezed by a lack of lending, which is becoming critical to many operations hit by a ‘triple-whammy’ of rises in fuel costs, tax and inflation.
And it adds: “Across many sectors, smaller operations that rely on sub-contracting to the public sector are also being affected by the impact of Government cuts that are now beginning to filter down the supply chain.”
Adcroft principal Rosalind Hilton said: “There is no doubt that self-employed business owners are now facing the brunt of the difficult economic conditions we are seeing in the region.
“The number of self-employed seeking personal insolvency solutions has shown a worryingly large rise and that trend is set to continue.
“Added to that, we are still not seeing a real easing of tight credit conditions and there is little doubt this is harming the SME sector.
“Lack of lending is becoming a critical factor to many businesses.”