Clarke Bell has reported a notable increase in solvent company closures, with the number of Members’ Voluntary Liquidations (MVLs) finalised in February 2025 nearly quadrupling compared to January.
This jump reflects a growing trend among company directors choosing to close down while the tax regime remains favourable. The shift comes amid persistent economic uncertainty and dissatisfaction with the recent Spring Statement, which many believe fell short of addressing the challenges faced by SMEs.
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.”
Government’s Spring Statement Leaves Gaps for SMEs
The Chancellor’s Spring Statement in March 2025 outlined an ambitious vision for long-term growth through investment in national infrastructure and digital transformation. However, it offered little in the way of short-term support for smaller firms navigating immediate cost pressures.
Rising employer contributions, minimum wage increases, and ongoing inflation are driving up operational expenses, making it harder for businesses to sustain profitability.
Feedback from the business community highlights frustration over the lack of immediate relief, with many owners now looking at winding down as a strategic response.
Solvent Liquidations as a Tactical Business Decision
An MVL is a voluntary, formal process through which a solvent business can be closed and its remaining capital distributed. Clarke Bell believes the recent increase suggests more directors are planning ahead—whether for retirement, consolidation, or redirection—before any changes to tax legislation come into force.
Although MVLs have remained steady in previous months, the February figures show the most substantial single-month growth Clarke Bell has recorded in over a year.
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.”
Future Financial Planning Takes Priority for Directors
With both the Autumn Budget and Comprehensive Spending Review looming, many business owners are focusing on risk mitigation and long-term value extraction. Any potential adjustments to Business Asset Disposal Relief or Capital Gains Tax could impact how directors manage their exit strategies.
Clarke Bell’s latest MVL figures suggest that if market conditions remain unchanged, solvent liquidations may continue to rise throughout 2025.
