- 1st October 2020
- Posted by: Suzy Hill
- Category: Personal Tax, Business News
Covid-19: insolvency measures extended
The government is to extend a raft of changes to insolvency measures which were introduced earlier in the pandemic, in order to give businesses more breathing space
The temporary measures were included in the Corporate Insolvency and Governance Act and were set to expire on 30 September.
The extension means that companies and other qualifying bodies with obligations to hold AGMs will continue to have the flexibility to hold these meetings virtually until 30 December.
Statutory demands and winding-up petitions will continue to be restricted until 31 December to protect companies from aggressive creditor enforcement action as a result of coronavirus related debts.
Termination clauses are still prohibited, stopping suppliers from ceasing their supply or asking for additional payments while a company is going through a rescue process.
However, small suppliers will remain exempted from the obligation to supply until 30 March 2021 so that they can to protect their business if necessary.
The modifications to the new moratorium procedure, which relax the entry requirements to it, will also be extended until 30 March 2021. A company may enter into a moratorium if they have been subject to an insolvency procedure in the previous 12 months.
Measures will also ease access for companies subject to a winding up petition.
Business Minister Lord Callanan said: ‘It is vital that we continue to deliver certainty to businesses through this challenging time, which is why we are now extending these important and necessary measures to protect companies from insolvency.
‘Through this measure, we want to ensure businesses are able to not only come through this testing period, but also to plan, adapt and build back better.’