Welsh insolvency specialist says rising costs, shrinking margins and unpaid bills are continuing to place businesses under severe pressure

BUSINESSES across Wales are continuing to face a difficult trading climate as rising costs, falling profits and cashflow pressures take their toll, an insolvency specialist has warned.

Government figures released on Friday (July 17) show there were 1,845 corporate insolvencies in June 2026.

That was four fewer than the 1,849 recorded in May and 10 per cent lower than the 2,048 reported in June last year.

However, Andy McGill, restructuring and insolvency partner at business advisory firm Azets, said the figures remained a cause for concern, with many directors struggling to keep their companies afloat.

Mr McGill, who covers Wales from Azets’ offices in Cardiff, Swansea and St Asaph, said Creditors’ Voluntary Liquidations continued to dominate the figures.

He said: “While 50 fewer took place compared with last month, CVL numbers remain higher than they were before the pandemic, as directors lack the confidence and cash to keep their firms open in a trading climate dominated by rising costs, shrinking margins and political and economic uncertainty.”

Compulsory liquidations also remain higher than they were at the beginning of the year, with creditors increasingly using the courts to recover unpaid debts.

Mr McGill said the patience shown by creditors during the pandemic had largely disappeared, with businesses and public bodies now watching payment deadlines more closely and chasing overdue invoices.

“Everyone is short of money, everyone is watching their payment deadlines and chasing unpaid invoices, and it is likely this will continue in the second half of the year,” he said.

“Times are tough for Britain’s businesses. It costs more to hire staff, profits are falling and cashflow levels are under pressure.

“Firms have been fighting financial fires in one form or another since 2020.”

He said increases in rents, business rates, materials, wages, products and energy had steadily reduced profit margins over the past six years.

Energy bills remained a particular concern for businesses that were unable to pass increased costs on to their customers.

Retailers and hospitality businesses were among those facing the greatest pressure, with some reducing recruitment as they attempted to control costs.

Mr McGill said that although sales volumes may be increasing in some sectors, this did not necessarily mean businesses were making more money.

“Many businesses are having to work harder simply to stand still,” he said.

“Where they can, they avoid passing their costs on to customers, but many simply are not able to do this anymore.”

The construction industry was also being affected by delayed project starts, planning difficulties, late payments, tight margins and rising material costs.

Mr McGill said improved summer weather could help increase construction output, although it remained unclear whether this would be enough to significantly improve conditions within the sector.

He urged company directors worried about their finances to seek professional advice at the earliest opportunity.

“It is a hard call to make and an incredibly tough conversation to start,” he said.

“But doing so while your worries are still new gives you more options and more time to decide your next step than if you wait until the problem becomes more severe.

“It usually gives you a better chance of turning the situation around.”

Strategic proposal calls for temporary suspension of rates to support shops and businesses during town centre regeneration

A PROPOSAL for Haverfordwest to become the Welsh Government’s national pilot for the temporary suspension of business rates has been presented to local politicians and business representatives.

Councillor Randell Izaiah Thomas-Turner unveiled the 24-page strategic report following 18 months of work and more than two years of discussions with residents and traders.

He said business rates had repeatedly been identified as one of the greatest obstacles facing Haverfordwest town centre, particularly while major regeneration work is taking place.

The proposed pilot would temporarily suspend business rates during the regeneration programme, with the aim of attracting new investment, supporting existing traders and bringing vacant premises back into use.

Councillor Thomas-Turner said the initiative could also create jobs, increase footfall and help the town maximise the economic benefits of projects including the redevelopment and reopening of Haverfordwest Castle.

The proposal was discussed at a meeting attended by Henry Tufnell MP, Paul Davies MS, county councillor Dai Clements, Plaid Cymru representative Billy Shaw, Deputy Mayor Councillor Adam Benson-Davies, Hedi Lewis of Haverfordwest Business Circle and independent business owner Ben Evans.

Councillor Thomas-Turner said Paul Davies MS had pledged his support, while representatives from Labour and Plaid Cymru had also engaged positively with the proposal.

He said: “This is not about party politics. It is about securing the best possible future for Haverfordwest and ensuring businesses are supported while the town undergoes significant regeneration.

“A temporary suspension of business rates could encourage new businesses to invest, protect existing traders, create jobs and help fill empty shops.

“Today was not the finish line. It was the beginning of the next stage of the campaign.”

He added that the proposal would require support from residents, businesses, Haverfordwest Town Council, Pembrokeshire County Council, Members of the Senedd, the local MP and the Welsh Government.

No representative from Reform UK attended the meeting.

CAPTION:

Political representatives and members of Haverfordwest’s business community met to discuss the proposed business rates pilot.

PEMBROKESHIRE’S leader is to write to Welsh Government to push for a review of the contentious 182-day rule for self-catering holiday properties which otherwise have to pay second homes tax.

Self-catering businesses not meeting the 182-day criteria end up paying the second homes council tax premium, currently 125 per cent on top of the general rate, in the county, along with similar premiums for the other elements of the overall bill such as the police precept.

In a submitted question heard at the July 16 meeting of Pembrokeshire County Council, Cllr Huw Murphy asked: “Most councillors are aware that much of Pembrokeshire relies on tourism and hospitality for its economic success. A key element of a successful Pembrokeshire tourism industry is the self-catering sector.

“Plaid Cymru in its manifesto made several pledges for its first 100 days in office, one under the headline of ‘Unleashing Wales Economic Potential’ which made no specific mention of the 182 letting day rule that was introduced by the previous Labour Government under their co-operation agreement with Plaid Cymru.

“However, Plaid Cymru prior to Senedd elections in May 2026, stated that they would review the 182-day threshold which has been a disaster for many self-catering businesses, many of whom are in rural and coastal communities. I have raised this matter on several occasions since being elected.

“Through speaking to those operating in the self-catering sector there is a clear need to reduce the 182-day threshold. I should point out that in the past I have suggested it be reduced to 140 days and still hold that view.

“Over 50 days have now passed since the Senedd Elections, but we have not heard any details of a review of the 182-day letting rule.

“Therefore, will the Leader [Cllr Tessa Hodgson] write off to the First Minister outlining the concerns of many Pembrokeshire county councillors with regards to the 182 days letting rule and ask for a reply setting out when Welsh Government intend to commence a review of this policy, which is much needed?”

Responding to the submitted question, Cllr Hodgson said she was happy to write a letter pressing the issue, adding she understood a Welsh Government review was expected, but was not aware of the timeframe for that at the current moment.

Cllr Murphy said, since his submitted question was publicised, he had been “inundated with emails” from constituents, “confirming the urgency” of a review.

Back in 2023, Cllr Murphy submitted an unsuccessful notice of motion to full council calling for the 182-day rule in Pembrokeshire to be lowered, proposing a figure of 140 days.

At the time of the 2023 call it was instead agreed to review the situation and for the council to raise its concerns to Welsh Government.