Clarke Bell has reported a marked increase in the number of Members’ Voluntary Liquidations (MVLs) completed in February 2025, carrying out nearly four times the number of solvent closures compared to the previous month.
This surge appears to reflect growing caution among company directors, many of whom are choosing to wind up solvent businesses and release funds while current tax rules remain favourable. The timing follows the Chancellor’s Spring Statement, which left many SMEs uncertain about short-term government support.
John Bell, Director at Clarke Bell, said: “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 Review of Business Viability
The Spring Statement, presented in March 2025, laid out government ambitions for future growth centred on defence spending, housing, and digital infrastructure. However, the absence of immediate financial relief for small and medium-sized enterprises has raised concern among business owners.
With employers facing higher National Insurance bills, a rising National Living Wage, and persistent inflation, the cost of staying operational has increased—causing some directors to reconsider their long-term plans.
The response from within the business sector has largely echoed one sentiment: while long-term reforms are welcome, short-term pressures are forcing hard decisions now.
MVLs Increasingly Viewed as a Strategic Exit Route
A Members’ Voluntary Liquidation offers a structured method to dissolve a solvent company and return its capital to shareholders. The sharp increase in February suggests more business owners are stepping back from trading—whether for retirement, business restructuring, or in anticipation of future policy changes.
While MVL volumes remained relatively consistent throughout 2024, February’s jump marks the most significant month-on-month rise Clarke Bell has seen in the past year.
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.”
Business Owners Prepare for Possible Tax Reforms
With the Autumn Budget and Comprehensive Spending Review expected later this year, business owners are already reassessing their financial strategies. Potential reforms to Capital Gains Tax and Business Asset Disposal Relief are top of mind for those seeking to release value from their businesses.
Based on Clarke Bell’s February figures, it appears that solvent liquidations are becoming an increasingly popular route for directors navigating an unpredictable economic environment—and this trend may continue if current conditions persist.
