Exclusive: Building suppliers issued the most petitions during the pandemic
Building suppliers dished out the most winding-up petitions to companies owing them cash during Covid, exclusive data has revealed.
Audit, tax and advisory firm Mazars said building suppliers made up 28 per cent of all winding-up petitions filed since February 2020.
During the pandemic, troubled construction firms often failed to pay owed cash to merchants. This was due to clients paying their own bills late, Mazars said.
Late payments are becoming more endemic within the sector as it faces skyrocketing costs for materials.
Michael Pallott, Mazars’ partner, said: “Builders’ merchants have always had to deal with the cash flow issues that their clients face but the pandemic worsened them significantly. Having to put customers into insolvency to get paid has become worryingly common for them.”
Energy suppliers made up nine per cent of all petitions to wind up businesses while commercial finance providers made up eight per cent.
HMRC, which is usually the biggest filer of such petitions, has filed just seven per cent of petitions since the beginning of Covid lockdowns.
Hundreds of UK construction companies have collapsed each month as the sector has been hammered by supply chain disruption and labour shortages.
Government insolvency data released last month revealed that between August and October 2021 797 construction firms went bust, up by more than a fifth compared to the previous three months.
“With costs escalating and labour problems intensifying, it’s little surprise that almost a quarter of firms say turnover has decreased and more companies are going to the wall,” said Susannah Streeter, senior investment and markets analyst Hargreaves Lansdown.