The temporary insolvency measures protecting businesses with coronavirus-related debts will be phased out and replaced by new provisions from next month, it has been announced.
The Insolvency Service said the changes will help firms “get back on their feet” to give them more time to recover.
According to the report, the temporary provisions, brought in under the Corporate Insolvency and Governance Act 2020 in June last year, will be phased out from 01 October.
The measures prevented creditors from initiating aggressive enforcement action – such as winding-up petitions – but only where the debt is coronavirus related.
But new rules will come into force from October in response to coronavirus restrictions being lifted.
The Insolvency Service said the new legislation will:
Commercial tenants will also continue to be protected from eviction until 31 March 2022, but only where commercial rent arrears have built up during the pandemic.
Commenting on the changes, Business Minister Lord Callanan said: “The success of our vaccine rollout means we are seeing life and the economy returning to normal with a strong rebound, and the time is right to lift the insolvency restrictions that were needed during the pandemic.
“At the same time, we know many smaller businesses are rebuilding their balance sheets and reserves, and some will need more time to get back on their feet. These new measures protections will help them to do that.”
The new rules will be in force until 31 March 2022.
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