AN “INSOLVENCY tsunami” is set to land when government support for struggling businesses ends, it has been claimed.

The warning comes from Damon Watt, recently hired as senior associate in the insolvency and business recovery team at Dorset firm Ellis Jones Solicitors.

Mr Watt said: “There is an insolvency tsunami waiting to land.

“The government’s emergency provisions which have supported many businesses have been extended but this is delaying the inevitable.

“Businesses will face greater pressure when support winds down, bounceback loan repayments become due and tax deferments end.

“The vaccination programme is continuing apace and businesses are advised to take advice at the earliest opportunity so they have plans in place, including options for restructuring or insolvency if appropriate.”

Latest government figures showed that corporate insolvencies fell in 2020 compared to 2019 – down to 12,557 from 17,224 – as the government rolled out emergency support.

However, they rose sharply in the final quarter of 2020 – suggesting that the impact of lockdowns was beginning to take effect.

The government’s furlough scheme to avoid widespread job losses has been extended until September.

Coronavirus business interruption loans (CBILS) and bounce back loans (BBLs) have been extended until March 31. Protection against statutory demands and winding-up petitions continues until the end of June, as does a business rates holiday.

Mr Watt has been ranked in both the Legal 500 and Chambers and Partners guides to the legal profession. He has 20 years’ experience in the sector and has worked on high-profile insolvencies including those of Comet and Sealine International. He is a member of the trade body R3, the Insolvency Lawyers Association and the Insolvency Practitioners Association.

He said: “It is an exciting time to come to Dorset both personally and professionally.”

Ellis Jones has more than 140 staff at offices in Bournemouth, Canford Cliffs, Ringwood, Swanage, Wimborne and London.

Caroline Palacio, head of insolvency and business recovery, said: “Damon is another high-calibre appointment to our team.

“He will play a pivotal role as we seek to achieve the greatest results for businesses and individuals in the times ahead.”