Nearly 50,000 British companies are in "critical" financial distress as taxes and economic turbulence hammer businesses, a report has warned.
Begbies Traynor’s latest Red Flag Alert report reveals the number of companies on the brink of collapse has risen more than 20% in Q2 compared to the same period in 2024, and 9% on Q1 this year.
The Times reports bars and restaurants have been the worst hit by increasing economic pressure, with the report indicating 40% suffering declining financial health.
The travel and tourism sector comes a close second, with 39% of firms reporting mounting financial worries.
Ric Traynor, executive chairman of Begbies Traynor, said: “Small and medium-sized businesses across the UK are being put under immense strain by the recent increases to employer’s national insurance [contributions] as well as the increase to the national minimum wage.
"With limited financial headroom to absorb rising costs, many businesses are now reaching a tipping point.
“Taken together with geopolitical uncertainty, tariffs, dampening business confidence and continued financial pressures, UK businesses have many difficult decisions to make in the coming months."
Read the full story on The Times website.