According to a press release from the Government’s Insolvency Service dated 9 September 2021, the temporary insolvency measures brought in to protect small businesses during the pandemic are being phased out from 1 October 2021.
Companies experiencing financial difficulties as a result of the pandemic have been protected from creditor action since June last year, through the Corporate Insolvency and Governance Act 2020, a legislation enacted to ensure that businesses which had been detrimentally affected by the restrictions brought in during the lockdown periods, were not forced into insolvency. However as the economy slowly rebounds to pre-pandemic trading conditions, largely as a result of the vaccine rollout, the restrictions on creditor actions will be phased out.
New measures will be brought in to help smaller companies get back on their feet to give them more time to trade their way back to financial health before creditors can take action to wind them up. According to the Government’s Insolvency Service the new legislation will:
- Protect businesses from creditors insisting on repayment of relatively small debts by temporarily raising the current debt threshold for a winding up petition to £10,000 or more.
- Require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding up action.
- These measures will be in force until 31 March 2022.
Restrictions remain in place for commercial landlords from evicting and winding up limited companies for commercial rent arrears built up during the pandemic until 31 March 2022, whilst the government implements a rent arbitration scheme to deal with commercial rent debts accrued during the pandemic.
The Debt Recovery team at Thackray Williams specialises in providing credit control and debt recovery support. Whether you are large complex organisation with thousands of debts or a small business with only a handful, we would work with you to clearly understand your business, industry, credit control and cash flow requirements so that we can design our support to best suit your needs. Our debt recovery service is fast, efficient and commercial.