17 October 2016 - Janet Bird
The extra costs associated with the introduction of the National Living Wage have left nearly 100,000 businesses struggling, new data has shown.
A report from independent UK insolvency company Begbies Traynor revealed 97,342 businesses were "in distress" in the sectors affected by the National Living Wage. This compares to 78,917 in April - just before the pay rise was introduced.
Companies in the retail sector were worst hit, with 33,835 sliding into "financial distress". However, Begbie Traynor said all sectors had experienced "a dramatic spike in corporate distress", with 13,772 wholesalers, 10,809 bars and restaurants and 13,071 transport and logistics companies also affected.
Begbies Traynor class companies as "in distress" if they have suffered a sustained deterioration in areas such as working capital, retained profits or net worth, or if they have minor county court judgements filed against them.