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The conflict in Iran is already taking a toll on businesses and balance sheets across the UK, warns Matthew Richards, joint head of restructuring & insolvency at accountancy and business advisory group Azets:

Richards says an increasing number of directors are seeking advice about their finances as they fear they will not be able to survive the economic aftershocks of the war in Iran, adding:

Directors who were previously surviving have been concerned about the impact the war will have on their finances, and the increase in costs it caused has been the tipping point for many firms. The longer this carries on, the bigger impact it will have on margins, access to finance and affordability of funding, as well as consumer spending as households attempt to manage their own costs and cut back on anything that isn’t essential.

“With the war likely to continue, cost pressures continuing to be a problem and additional expenses like the new business rates and the changes to national minimum wage taking effect this month, it’s very likely demand for insolvency support will increase in the coming months.

The increase in March 2026 was mostly driven by more than 100 connected companies in the Real Estate sector entering administration.

“Ongoing tensions in the Middle East are driving up energy and fuel costs, disrupting supply chains, and keeping inflation stubbornly above the Bank of England’s 2% target. The UK economy is expected to be among the most exposed in the developed world - yet much of this impact has not yet filtered through to company balance sheets or the latest insolvency data.

“Compounding this, the new tax year has brought a fresh wave of cost pressures. While there have been no headline rate rises, frozen thresholds, reduced reliefs and tighter allowances are quietly intensifying ‘fiscal drag’ - steadily increasing the tax burden on both businesses and consumers. Together, these twin pressures are squeezing margins and suppressing demand which risks driving more businesses into the red.