UK Construction Insolvency Index
UK construction company insolvencies rose 49.9% between 2016 and 2025
A sourced, monthly read on construction company insolvencies across the UK, drawn from Insolvency Service public records. Covering all SIC Section F construction businesses, broken down by insolvency procedure. Updated May 2026.
Key findings
- Construction insolvencies rose 49.9% from 2,793 in 2016 to 4,188 in 2025. The highest annual total in the series is 4,616 in 2023, so 2025 sits just below the peak rather than at it.
- In the trailing 12 months to May 2026, 4,038 construction companies entered insolvency across England, Wales and Scotland, making it consistently the highest-volume sector in the Insolvency Service data.
- Creditors Voluntary Liquidation (CVL) is the dominant procedure in every year, and its share has risen across the series: from 62.7% of construction insolvencies in 2018 to a peak of 87.5% in 2021, and 74.5% in 2025. Directors choose voluntary wind-up far more often than creditors force a compulsory liquidation through the courts, and increasingly so.
- The 2022 to 2023 surge followed the end of pandemic-era insolvency restrictions (the Corporate Insolvency and Governance Act 2020 temporarily prohibited winding-up petitions). The 2024 to 2025 period shows a modest fall from those peaks, though levels remain well above the 2016 to 2019 baseline.
- In May 2026, 302 construction companies entered insolvency, of which 234 were CVLs, 51 compulsory liquidations, and 9 administrations.
Source: Insolvency Service, Company Insolvency Statistics (record-level data), under the Open Government Licence v3.0. England, Wales and Scotland. Figures may be cited with attribution to Trade Tax Specialists.
Construction insolvencies by year
Each bar shows the total number of construction company insolvencies registered in that calendar year (complete years only). The sharp rise from 2022 reflects the unwinding of the pandemic-era moratorium on winding-up petitions. The 2020 and 2021 dip is largely attributable to those temporary restrictions, not underlying improvement in sector health.
The monthly trend by procedure
The stacked area chart shows monthly insolvency registrations from January 2016, broken down by the three main procedures: CVL (orange), compulsory liquidation (amber), and administration (neutral). CVL dominates throughout, spiking sharply in 2023. The narrowing of the compulsory band during 2020 to 2021 is the direct effect of the pandemic restrictions.
Breakdown by procedure
The table shows the number of construction company insolvencies by procedure type in 2025. CVL accounts for the large majority; compulsory liquidations are the second largest category, triggered by creditor petitions to the court.
| Procedure | 2025 count | % of total |
|---|---|---|
| Creditors Voluntary Liquidation (CVL) | 3,119 | 74.5% |
| Compulsory Liquidation | 837 | 20.0% |
| Administration | 165 | 3.9% |
| Company Voluntary Arrangement (CVA) | 19 | 0.5% |
| Administrative Receivership | 0 | 0.0% |
| Total | 4,188 | 100% |
Insolvencies by construction sub-sector
Every construction insolvency falls into one of three SIC divisions: Division 41 (building construction, mainly housebuilders and commercial developers), Division 42 (civil engineering, roads, railways, bridges and utilities), and Division 43 (specialised construction activities, the electrical, plumbing, plastering, joinery, painting and other trades most CIS subcontractors work in). The chart shows how the three have moved since 2016.
| Division | Trailing 12 months | Share of total | Change since 2016 |
|---|---|---|---|
| Building construction (Division 41) | 1,536 | 38% | 79.9% |
| Civil engineering (Division 42) | 228 | 5.6% | 15.1% |
| Specialised construction activities (Division 43) | 2,274 | 56.3% | 38.0% |
Division 41 (building) insolvencies have risen the fastest of the three since 2016, up 79.9% against 15.1% in civil engineering (Division 42), more than five times the growth rate, and 38.0% in specialised trades (Division 43). Division 43 (specialised trades) remains the largest single contributor by volume in every year of the series.
Methodology and sources
Data source. Counts are drawn from the Insolvency Service record-level data file, published monthly as part of the Company Insolvency Statistics release on gov.uk. Each record represents a single insolvency event registered with Companies House or the Insolvency Service, tagged with the company's SIC code and procedure type. We filter to SIC 1-digit Section F (Construction), which encompasses Division 41 (construction of buildings), Division 42 (civil engineering), and Division 43 (specialised construction activities).
What is counted. Each figure is the number of insolvency events registered in that period, not the number of unique companies. A company that enters administration and subsequently converts to CVL appears twice: once for each procedure. This is consistent with how the Insolvency Service reports its own headline figures.
Sub-sector breakdown. The same record-level file tags every insolvency with a 2-digit SIC division as well as the procedure type, so the Division 41/42/43 breakdown above uses no additional source: it is the same Insolvency Service data, split one level deeper.
Caveats. Counts are not rates: an increase in insolvency numbers may partly reflect growth in the total number of active construction companies rather than a worsening of sector conditions. The pandemic years (2020 to 2021) are not comparable to other years because temporary legislation suppressed compulsory liquidations. CVA and receivership counts are low and should be read as indicative only: CVAs peaked at 2.4% of construction insolvencies in 2016, ran between 1.7 and 2.4% from 2016 to 2019, and have been under 1% in every year from 2021 onwards, while receivership has never exceeded 0.2% in any year of the series.
Updated. Data through May 2026 (latest Insolvency Service release). Generated Jul 2026.
- Company Insolvency Statistics -- Record-Level Data (The Insolvency Service)
Download the insolvency data (CSV)
Free to cite and republish with attribution to Trade Tax Specialists. This page is a data summary and does not constitute insolvency or tax advice on any individual situation.
Working in construction? Protect your CIS position.
High insolvency rates in construction affect every part of the payment chain, including subcontractors operating under CIS. Understanding your gross payment status, your refund entitlements, and your tax position is a practical buffer against client-side financial difficulties. Our calculators help you model your CIS refund and GPS eligibility.
Frequently asked questions
What does the UK Construction Insolvency Index measure?
It counts company insolvencies registered each month under SIC Section F (Construction), drawn from Insolvency Service record-level data covering England, Wales and Scotland. The index tracks five main procedures: Creditors Voluntary Liquidation (CVL), compulsory liquidation, administration, Company Voluntary Arrangement (CVA), and administrative receivership. Counts are gross registered events on the date of registration.
Why is construction the highest-insolvency sector in the UK?
Construction companies face several structural pressures that make insolvency more common than in other sectors. Fixed-price contracts leave contractors exposed when material or labour costs rise unexpectedly. Retentions (money held back by clients) create cash-flow gaps that can last months or years. Payment chains are long, so an upstream contractor's difficulties quickly pass downstream to subcontractors. Thin margins and high working capital requirements mean that even a single large contract going wrong can be terminal. These are not recent phenomena: construction insolvencies were already climbing before the pandemic, from 2,793 in 2016 to 3,513 in 2019, and the sector has run above that pre-pandemic level every year since 2022.
What is a Creditors Voluntary Liquidation (CVL)?
A CVL is the most common insolvency procedure for construction companies. The company's directors resolve to wind up the business voluntarily when they conclude it cannot pay its debts. A licensed insolvency practitioner is appointed as liquidator to realise assets and distribute proceeds to creditors. In construction, the CVL share of all insolvency events has risen over this series: it ranged from 62.7% in 2018 to 87.5% in 2021, stayed between 62 and 65% throughout 2016 to 2019, and stood at 74.5% in 2025. Directors choose to wind up voluntarily far more often than they enter court-led procedures.
Where does this data come from?
All insolvency counts come from the Insolvency Service's record-level data file, published as part of the Company Insolvency Statistics statistical release on gov.uk. The Insolvency Service is the UK government agency that handles corporate and personal insolvency. Its data is published under the Open Government Licence v3.0 and covers England, Wales and Scotland. The figures are updated monthly.
Which part of construction has the most insolvencies: building, civil engineering, or specialised trades?
Specialised construction activities (SIC Division 43, which includes electrical, plumbing, plastering, joinery, painting and similar CIS subcontractor trades) consistently account for the largest share, over half of all construction insolvencies in every year since 2016. Building construction (Division 41, housebuilders and commercial developers) is the second-largest share and has been growing steadily, up from around 32% of construction insolvencies in 2016 to around 38 to 39% most recently. Civil engineering (Division 42, roads, railways, bridges and utilities) has by far the fewest companies and the fewest insolvencies of the three, typically under 250 a year, so its year-on-year figures move around more in percentage terms simply because the base is small.
Does rising insolvency affect CIS subcontractors?
Yes, directly. When a main contractor enters insolvency, subcontractors registered under the Construction Industry Scheme (CIS) often find themselves with unpaid invoices and retained amounts that are unlikely to be recovered in full. If you work under CIS and your main contractor has financial difficulties, it is worth reviewing your contract terms, your own cash-flow position, and whether you have any retention-release rights. Our team works with CIS contractors on both tax and financial planning.