Extension of temporary COVID insolvency measures
The Government has extended temporary insolvency measures providing further support to businesses during the pandemic.
Insolvency measures supporting businesses during the pandemic and helping them recover, are set to be extended till the end of June 2021.
The measures were introduced in the Corporate Insolvency and Governance Act in March 2020, including protecting businesses from aggressive creditor enforcement and removing personal liability on company directors, and have been previously extended on a number of occasions.
The measures being extended till the end of June 2021:
- Statutory demands and winding-up petitions will continue to be restricted to protect companies from creditor enforcement action due to debts related to coronavirus (COVID-19).
- Small suppliers will not have to continue to supply a business in insolvency. However, larger suppliers will not be able to cease their supply or ask for additional payments while a company is going through a rescue process.
- Entry into a moratorium will remain relaxed and a company will be able to enter a moratorium if they have been subject to an insolvency procedure in the previous 12 months. These measures will be extended until 30 September 2021.
Companies should now be using this extra time to map out their financial future. As COVID restrictions ease and trading conditions start to return to normal, the extension of these measures will provide much needed time for directors and stakeholders to plan how the company will manage once government support ceases to exist.
Acting sooner rather than later will allow us to look at more options available to the company, to achieve a more positive outcome and ultimately having more time to implement a rescue strategy than if left too late.
Contact one of our insolvency specialist today for a consultation in confidence:
North office: 01625 544 795
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East Mids office: 01246 224 399