The Government are looking into the possibility of relaxing the Insolvency rules in the UK as a result of the coronavirus pandemic, according to Sky News.
One measure being considered is a 90-day freeze on winding-up petitions in view of cash flow and operational difficulties as a result of coronavirus (Covid-19). Other measures being considered are the suspension of wrongful trading rules and extending the existing 10 business day moratorium period in administration.
Current international changes
The Australian and German Government’s have already introduced changes and it seems likely that our Government will follow suit.
The Chancellor of the Exchequer also last week set out a package of measures to assist businesses through this period of disruption caused by Covid-19.
This includes a package of measures to support businesses including:
- Furloughing staff and having their wages paid by the Government’s Coronavirus Jobs Retention Scheme.
- Deferring VAT for 3 months and Income Tax payments due in July (under self-assessment) deferred until January 2021.
- Statutory Sick Pay relief for small and medium sized businesses (“SMEs”) – 2 weeks SSP refund per employee effected by Covid-19.
- A 12-month business rates holiday for retail, hospitality, leisure and nursery businesses in England.
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief.
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a ratable value between £15,000 and £51,000.
- The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank for businesses with turnover of £45m or less.
- A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans.
- The HMRC Time To Pay Scheme – agreed on a case by case basis with HMRC.
Additional emergency procedures to assist businesses
Whilst the Government may well be considering additional emergency procedures to assist businesses effected by Covid-19 there are inevitable delays with the current measures i.e. the Coronavirus Jobs Retention Scheme is yet to be launched. In the meantime, it is important to continue dialogue with your creditors and stakeholders to enable you to navigate your way through one of the most turbulent times in peacetime economic history.
If your company is experiencing financial problems, as a result of the Covid-19, get in touch to discuss your current situation and the options available. Our skilled and experienced team of Insolvency Practitioners will help you find a solution.
Please call us now on 0330 159 8080 for a FREE initial consultation.