Businesses have been given “much needed breathing space” during the Covid-19 pandemic with the government’s extension of insolvency measures until 2022.
The government announced that it is extending the powers it has under the Corporate Governance and Insolvency Act and intends to make temporary amendments or modify the effects of corporate insolvency and governance legislation for an additional year.
The government laid the regulations on 11 February 2021 in Parliament ahead of the power expiring on 30 April 2021.
The government previously updated the rules in December 2020, when several Covid-19 related measures to support businesses were announced. Further details on the support measures can be found in our earlier blog on the topic – please click here.
Some of the support measures from the government include extending the temporary suspension of the use of statutory demands and winding-up petitions where there is a valid Covid-19 defence and also extending the temporary removal of the threat of personal liability for wrongful trading from directors until 2022.
The latest announcement is not surprising as the measures are needed to relieve pressure on businesses dealing with Covid-19 until there is some form of strategy as to how they are expected to deal with the repayment of Covid-19 support debt.
Coupled with the announcements in his Budget speech, this Chancellor clearly does not intend for the economy to suffer any additional shock by the sudden cancelling of the Covid support measures currently in place. However, the withdrawal of the support measures is now a matter of time and business owners need to plan ahead to meet this challenge.
To discuss any corporate recovery or insolvency issues you may have, please contact Jeremy Oddie or Julie Webster below.