THE number of corporate insolvencies in Scotland rose in the three months covering July to September compared with the second quarter of last year, as Brexit uncertainty continued to weigh on businesses.

New official statistics from Accountant in Bankruptcy (AiB), published yesterday, show that 235 Scottish registered companies became insolvent or entered receivership in the second quarter, a slight rise in the 232 during the same period of 2018.

The AiB also noted that there were 127 members’ voluntary liquidations – a process where shareholders appoint a liquidator to formally close down a solvent company - in the second quarter, an increase of 17.6 per cent on last year.

However, the figures show that corporate insolvency numbers in the second quarter fell by 1.7% between July and September when compared with the previous quarter, marking the second quarterly fall in a row.

The latest figures from AiB were published as Brexit uncertainty continues to weigh heavily on the business sector.

An extension to the October 31 deadline for the UK’s departure from the European Union now appears likely after MPs defeated Prime Minister Boris Johnson’s attempt to fast-track his Brexit deal through the House of Commons in just three days.

EU member states are likely to approve

an extension, after European Council President Donald Tusk tweeted that he would “recommend the EU27 accept the UK request for an extension”, though as of last night a new deadline had not been set. Speculation is growing that Mr Johnson will seek to hold a General Election to break the deadlock.

Commenting on the latest insolvency figures, Tim Cooper, chairman of insolvency and restructuring trade body R3 in Scotland, said Brexit was “not the only challenge businesses are facing”.

Mr Cooper said: “This is the second

quarterly fall in a row, in defiance of a general upward trend since the start of 2017 – but the Scottish corporate insolvency numbers have been bouncing around a fair bit from quarter to quarter, reflecting a generally unsettled working environment for businesses.

“Brexit uncertainty has, of course, been something Scottish businesses have had to deal with for some time, but it’s not the only challenge businesses are facing. Our members have sometimes found that Brexit uncertainty has been used as a handy excuse to cover up other problems at companies they’ve worked with. Despite the quarterly fall, insolvency numbers are slightly higher than they were this time last year.”

Mr Cooper, a corporate recovery partner at law firm Addleshaw Goddard, highlighted an easing of Brexit stockpiling by manufacturers and the prospect of tariffs on Scotch whisky exports to the US among the challenges facing Scottish business. Distillers are facing import tariffs of 25% in the US – the biggest market for Scotch whisky by value – as part of the Trump administration’s retaliation to the subsidies provided to Airbus by the EU.

Mr Cooper said: “Businesses in Scotland still face a lot of headwinds. The manufacturing sector contributed to a fall in Scotland’s GDP over the second quarter as stockpiling activity softened following the missed EU departure date of 29 March. Businesses which had built up supplies in preparation were left with plenty of stock to hand, reducing demand.

“And Scotland’s manufacturers face fresh challenges in the form of a potential trade spat with the US, which may have an impact on our flourishing whisky sector. However, demand for blends and single malts from the rest of the UK – and the rest of the world – remains strong.”