By Altus Group | November 12, 2020

Claims of more than £1.3 million a day, against insolvent employers, are currently being paid out of the National Insurance Fund to employees that have been made redundant this year, the highest amount in a decade.

The Insolvency Service an agency of The Department for Business, Energy and Industrial Strategy paid out a total of £114.46 million in the 3 months to 30thSeptember 2020 to former members of staff made redundant after their employer entered into either administration, liquidation, a CVA or another form of corporate insolvency according to analysis from the real estate adviser, Altus Group.

A total of £71.29 million was paid out in redundancy pay whilst £29.10 million was for money that would have been earned working a notice period. The balance went on holiday pay and outstanding payments like unpaid wages, overtime and commission according to the data released to Altus Group under the Freedom of Information Act.

The news coincides with data released by the Office for National Statistics showing a record 314,000 redundancies were recorded during the same period.

Insolvent companies, across all sectors of the British economy, that couldn’t pay their debts have now cost British Taxpayers £358.62 million during the first 9 months of the 2020 calendar year, the highest amount in a decade.

The Centre for Retail Research say so far this year more jobs have been affected by major retail insolvencies than at any point since their records began and higher than during the financial crisis in 2008.

Robert Hayton, Head of Property Tax at Altus Group, says expediating tens of thousands of tax appeals could help safeguard jobs by providing business with liquidity adding “the pandemic has had a profound effect upon property values and the Government via the Valuation Office has accepted that the business rates assessments under appeal are now excessive. Whilst it will take time to establish what the full reductions should be, urgent interim adjustments can and must be made to trigger much needed tax refunds to help those businesses without the rates holiday whilst ensuring those businesses returning to normal bills next year pay a much reduced amount.”

Source data.
H1 2020*
Redundancy Pay
Holiday Pay
Arrears of Pay
Notice Pay
Total
Administration
£85,175,000
£4,616,000
£9,386,000
£23,663,000
£122,840,000
Liquidation
£81,757,000
£4,994,000
£11,736,000
£18,177,000
£116,664,000
Bankruptcy
£445,000
£44,000
£67,000
£130,000
£686,000
Receivership
£1,000
£0
£0
£4,000
£5,000
CVA
£2,861,000
£101,000
£147,000
£658,000
£3,767,000
IVA
£154,000
£0
£6,000
£38,000
£198,000
DRO
£1,000
£0
£0
£0
£1,000
Total
£170,394,000
£9,755,000
£21,342,000
£42,670,000
£244,161,000
* 1st January to 30th June 2020
       
01/07/20 to 30/09/20
Redundancy Pay
Holiday Pay
Arrears of Pay
Notice Pay
Total
Administration
£40,611,000
£4,641,000
£1,937,000
£18,921,000
£66,110,000
Liquidation
£26,212,000
£3,402,000
£3,935,000
£9,290,000
£42,839,000
Bankruptcy
£269,000
£11,000
£23,000
£64,000
£367,000
Receivership
£6,000
£0
£0
£2,000
£8,000
CVA
£4,016,000
£68,000
£35,000
£759,000
£4,878,000
IVA
£174,000
£7,000
£15,000
£64,000
£260,000
DRO
£0
£0
£0
£0
£0
Total
£71,288,000
£8,129,000
£5,945,000
£29,100,000
£114,462,000
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