MANCHESTER, UK. 28th March, 2025 -Insolvency firm Clarke Bell reported a sharp month-on-month increase in Members’ Voluntary Liquidations (MVLs), completing almost four times as many solvent company closures in February 2025 as it did in January.
The data reflects a noticeable shift in business sentiment, with more company directors choosing to close solvent companies and withdraw funds while the current tax environment remains stable. The trend comes against the backdrop of sustained economic pressure and growing concerns over the lack of immediate support in the government’s recent Spring Statement.
John Bell, Director at Clarke Bell, said: “The increase in MVL activity suggests that more directors are opting to take proactive steps in the current economic climate. Uncertainty around future tax changes, combined with rising business costs, is prompting many to review their position and plan ahead.”
Spring Statement Prompts Strategic Reassessment
The Chancellor’s Spring Statement, delivered in March 2025, outlined long-term ambitions for economic growth through investment in defence, housing, and digital transformation. However, many business groups noted the absence of short-term support for small and medium-sized enterprises (SMEs), particularly around immediate cost pressures.
Rising employer National Insurance contributions, increases to the National Living Wage, and persistent inflationary impacts have made it increasingly difficult for some businesses to justify continued trading under current conditions.
Industry responses to the Statement reflected a common view that while future reform is welcome, the lack of near-term relief leaves many SMEs vulnerable or reconsidering their future direction.
Solvent Closures Reflect a Broader Business Strategy
A Members’ Voluntary Liquidation is a formal process used to wind up a solvent company and return its remaining funds to shareholders. The uptick in MVL use this February may indicate a growing number of directors choosing to retire, pivot to new ventures, or consolidate multiple companies in the face of uncertain trading conditions.
Clarke Bell’s February figures follow a year in which MVL volumes have remained consistent but have not shown such a sharp month-on-month rise until now.
John Bell added: “While many companies are continuing to trade successfully, others are reaching a natural endpoint. We are seeing more directors assessing their business plans and deciding that, for various reasons, this is the right time to close their company. That may be influenced by tax considerations, succession planning, or simply wider economic uncertainty.”
Outlook Remains Mixed for 2025
As attention now turns to the upcoming Comprehensive Spending Review and Autumn Budget, many business owners are expected to continue reviewing their financial and operational positions. The potential for changes to Capital Gains Tax or Business Asset Disposal Relief is a particular concern for those looking to extract value from their business in the near future.
Clarke Bell’s February MVL data suggests that solvent liquidations may continue to rise if current conditions persist.
ENDS