Groundhog Day - Government Extends various measures to assist struggling business Posted: Mar 30, 2021

Why Groundhog Day you ask?

Over the last 12 months, I have posted about various Governments measures brought in to help business and it seems that we are going into a quarterly cycle of wondering if restrictions that are due to come to an end in the next few days will be renewed, or not, to receive confirmation very late in the day that they will. Indeed, we were told that these restrictions have an absolute end day of 31 March 2021 to find that they have been extended again!

On 24 March 2021, the Government announced that it will extend several temporary measures brought in by the Corporate Insolvency and Governance Act (CIG) until 30 June 2021. These are as follows.

• Statutory demands and winding-up petitions will continue to be restricted.
• Termination clauses are still prohibited, stopping suppliers from ceasing supply or asking for additional payments while a company is going through a rescue process. Small suppliers will remain exempted from the obligation to supply.
• The modifications to the new moratorium procedure, which relaxes the entry requirements to it, will also be extended.
• The temporary moratorium rules will also be extended.
• The Government has temporarily removed the threat of personal liability arising from wrongful trading for directors who continue to trade a company through the pandemic with the uncertainty that the company may not be able to avoid insolvency in the future.

 Separately the Government confirmed on 10 March 2021 that further help for commercial and residential tenants was available as follows.

• Ban on commercial evictions extended to 30 June 2021 to ensure businesses are supported as they re-open.
• Six-month notice periods and bailiff-enforced eviction ban extended to 31 May 2021 to protect residential tenants.
   

Clearly, these measures are welcome following what has been a very difficult year for many businesses. However, it does store up problems for businesses already struggling and could lead to a significant increase in business failures from June onwards as these measures come to an end.

We are beginning to see the early signs of businesses needing our help as the realisation that deferred VAT is becoming due and the first payment on various CBILS and Bounce Back Loans will start very soon.

If your business is being impacted and you think you could be facing insolvency, then talk to us. The first consultation is free and whether it results in comforting reassurance, a rescue plan, or an insolvency process, the sooner we start, the better your result will be.