Winding-up petitions increase by 165% in 2020, with further surge expected when ban ends
The number of winding-up petitions issued against restaurants increased by 165% in the first four-and-a-half months of 2020, with a further surge expected when the government's temporary ban is ended.
The number of petitions filed up to 20 April 2020 reached 53, compared to 20 during the same period in 2019, according to figures compiled by accountancy firm UHY Hacker Young.
The figures account for only the very early stages of the coronavirus crisis. The accountancy firm anticipates that some of the increase is attributable to a drop in high-street footfall, resulting in some underperforming restaurants falling into insolvency.
The government has announced a temporary ban against the use of winding-up petitions. This is currently set to end on 30 June, all though there is an expectation it will be extended.
Peter Kubik, a partner at UHY Hacker Young, said: "The recent jump in winding-up petitions against restaurants is unlikely to be the biggest increase we see this year. Once lockdown measures are relaxed and the new temporary ban on winding-up orders ends, a lot of restaurants will struggle to stay afloat for long.
"Restaurants will have an extremely small window to get customers back through the door before restart costs deplete cash and send them into insolvency. They are especially at risk being one of the last sectors to return to normal activity."
