Last Updated on: 31st March 2025, 07:20 am
Clarke Bell has seen a sharp rise in Members’ Voluntary Liquidations (MVLs), with February 2025 figures revealing nearly a fourfold increase compared to the previous month. The spike reflects a growing trend of company directors winding down solvent businesses amid mounting economic unease.
Many owners appear to be taking advantage of the current tax framework before any changes are introduced, particularly in light of minimal short-term support announced in the latest Spring Statement.
John Bell, Director at Clarke Bell, commented: “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.”
Spring Statement Triggers Shift in Business Sentiment
The Chancellor’s March 2025 Spring Statement set out long-term investment goals across defence, housing, and digital innovation. However, many SME stakeholders voiced concern over the lack of immediate support, especially as operational costs continue to rise.
Employer National Insurance increases, higher wage obligations, and persistent inflation are squeezing cash flows, prompting directors to reconsider their trading viability.
The response across the sector has underscored a pressing need for short-term relief, even as long-term reform ambitions are acknowledged.
MVLs Offer a Controlled Exit for Business Owners
An MVL allows a solvent business to close in an orderly fashion, distributing remaining assets to shareholders. February’s rise in MVLs may signal a growing number of owners deciding to retire, consolidate operations, or pursue new ventures amid growing economic headwinds.
The jump in activity contrasts with the more stable levels seen throughout 2024, suggesting a notable change in sentiment and strategic planning.
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.”
Looking Ahead: Directors Prepare for Fiscal Changes
As business owners await the Autumn Budget and Spending Review, many are expected to conduct further financial planning. Possible reforms to Business Asset Disposal Relief or Capital Gains Tax are among the issues prompting company directors to act sooner rather than later.
Clarke Bell’s recent surge in MVL cases suggests that the trend may well continue if no short-term interventions are introduced.
