THE full impact on Dorset businesses from the coronavirus crisis will only be revealed in the coming months as government support tails off, experts say.

The lockdown has seen a fall in the number of insolvencies among businesses in the Dorset Council area.

But business failures are likely to rise sharply as the chancellor’s coronavirus aid tapers out.

Eighty-six companies in the BCP Council area filed for liquidation between March 24 and June 30, compared with 16 in the same period last year, an investigation by the BBC Shared Data Unit has revealed. In the Dorset Council, the figure fell from 26 to 24.

The figures have been limited by the government’s £160billion support for businesses and by a pause in insolvency procedures.

The figures also show 1,021 were formed in the BCP Council area during lockdown and 713 in Dorset Council’s patch.

Nationally, insolvency notices were down 25 per cent on last year, but the information and communication sector saw a 31 per cent rise. Researchers also found the events industry was “on its knees”, with conferences not allowed until October.

Accommodation, food, arts and recreation, retail and construction all saw insolvencies drop, as government aid helped keep firms afloat despite the lockdown.

Economist Stuart Adam said: “Since many firms will undoubtedly shrink or go out of business and jobs will be lost – especially as the furlough scheme comes to an end – it will be vital over the coming months and years for others to start up or expand, to fill the gap and employ those left out of work.”

1,600 Bournemouth businesses are in 'significant financial distress'

Insolvency specialist Begbies Traynor recently pointed to a rising number of firms in “significant financial distress”. It says the economy before lockdown contained many “zombie businesses” which could not clear their debts or raise money to expand but which could continue trading.

Partner Julie Palmer said: “This crisis will force many zombie companies out of business. While these were clinging on to survival prior to the pandemic, many will now have become simply unviable due to high levels of debts and poor sales.”

A Treasury spokesperson said: “We’ve outlined a three point plan for supporting businesses through the crisis and spurring the UK’s economic recovery.

“The first stage of this was our £160 billion support package for business that included our job retention scheme, which has protected more than nine million jobs and has been extended until the end of October.”

The second stage, announced in July, included a 15 per cent VAT cut for hospitality, leisure and retail, the Coronavirus Job Retention Scheme Bonus, and job creation through investment in greening homes and buildings.

“As the economy re-opens, we will continue to look at how to adjust our support in a way that ensures people can get back to work, protecting both the UK economy and the livelihoods of people across the country,” the spokesperson added.