The UK Government has announced that measures put in place in March 2020 to help protect businesses from insolvency during the coronavirus pandemic will be extended. This will give businesses much-needed reassurance and respite in the months to come as the impact of coronavirus continues to effect commerce across the United Kingdom.
The temporary changes, originally introduced in the Corporate Insolvency and Governance Act 2020, were due to end on 30 September 2020. However, many have been extended. For example, the restrictions on statutory demands and winding-up petitions, which were introduced to help protect companies from aggressive creditor enforcement action, will continue until 31 December 2020. Termination clauses continue to be generally prohibited. This will assist companies going through a rescue process, by preventing suppliers from ceasing their supply or asking for additional payments.
The extension of these temporary measures and certain others will be welcomed by many businesses and should provide some relief to those going through challenging times. Those effected by these changes should keep an eye out for further developments, as it is possible that there will be further extensions beyond December 2020.