A total of 1,641 businesses, 190 of which came from the hospitality industry, filed for administration last year marking a 22% increase compared to 2022 and 91% rise in comparison to 2021.

Retail, construction, hospitality, manufacturing, and real estate were the worst-hit sectors, collectively accounting for 59% of the administrations.

Andy Taylor, partner and head of restructuring at Shakespeare Martineau, said: “The significant uptick in the number of companies filing for administration in 2023 underscores the challenges faced by businesses amid changing consumer habits, financial pressures, and geopolitical uncertainties.

“A shift in consumer buying habits, exemplified by a challenging January for the hospitality sector, adds to the narrative of subdued spending. Moreover, HMRC continues to be more active, with threatened enforcement pushing businesses towards considering their options, and many opting for administration as an alternative to being wound up on a compulsory basis.”