Sole traders bear the brunt of downturn, say advisers

THE self-employed are bearing the brunt of tough economic conditions, according to a report by Blackpool insolvency specialist Adcroft Hilton.

Quarterly data from the firm suggests rising numbers of sole traders and self-employed business owners are facing bankruptcy or seeking personal insolvency solutions.

Adcroft Hilton has 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. It expects a clampdown by HM Revenue & Customs could increase the number of business failures by 10%.

Figures compiled by the firm show the proportion of bankruptcy orders for sole traders and the self-employed has increased from 13% in the final quarter of 2009 to 18.9% a year later.

In the first quarter of 2011, 28 companies were wound up in Lancashire, the Fylde and Cumbria, with 114 creditors bankruptcies and 409 debtors bankruptcies.

The firm’s 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, with a growing number of casualties.

“The number of self-employed seeking personal insolvency solutions has shown a worryingly large rise and that trend is set to continue. We’ve also detected a more ‘hardline’ approach to VAT and tax matters and the result is that more small businesses across Lancashire, Cumbria and the Fylde coast are coming under direct pressure.”

Adcroft Hilton – which has branches across Lancashire, Cumbria and the Fylde coast servicing clients throughout the UK – has also highlighted an “increasing trend” towards non-qualified and unregulated operators advertising debt advice and solutions.