The figures show that 201 food and drink providers were subject to compulsory liquidation in 2014 - up slightly on the previous year when 181 businesses were wound up, but still lower than the 297 recorded in 2009.
The figures shows that the food and drinks trade is the third most common sector for winding up orders, after construction, and retail and wholesale.
Ashley Business Finance, which provides funding for companies to pay HMRC debts, says that despite the improving climate, many businesses are still struggling with tax bills built up over the past year or more. There are also signs that the taxman may be starting to get tough again, with Insolvency Service figures for the first quarter of 2015 showing a nine per cent rise in compulsory liquidations amongst businesses overall.
Jonathan Cranston, chair of Ashley Business Finance, said: “It’s not surprising that food and drinks trade is amongst the sectors worst affected as it contains many small businesses which employ a lot of staff. Trade is often seasonal so they may suffer cashflow problems and can’t pay the PAYE and VAT.
“In our experience HMRC can be very slow to chase outstanding money so companies may be lulled into a false sense of security. Often they prioritise other debts and, over the course of a couple of quarters, may end up owing large amounts which they can’t hope to clear in one go.
“When HMRC does start to chase them, it’s like a crocodile coming out of the water. Businesses in this situation have few options, particularly now HMRC’s Time to Pay scheme has been discontinued. Banks will refuse to lend and may even close their account if they discover there is tax outstanding.”
Ashley Business Finance is one of the few finance providers to offer funding for outstanding tax bills. Jonathan Cranston said the company assessed each case on its merits: “Borrowing to pay tax bills isn’t appropriate for every business – for some, the best solution may be to call in insolvency practitioners.
“However where the underlying business is profitable and the debts are the result of temporary problems or a one-off situation, accessing additional finance can give a struggling company a second chance.”