New measures announced on insolvency

The Government has announced that it will relax insolvency regulations to help businesses facing bankruptcy during the coronavirus pandemic.

Speaking at the weekend, Alok Sharma said at-risk firms would be given extra time to get through the crisis, with new rules meaning companies undergoing restructuring can still access supplies and raw materials while they seek a rescue plan.

The Government will also temporarily suspend wrongful trading provisions for company directors to remove the threat of personal liability during the pandemic. This will apply retrospectively from March 1.

Sharma said: “We will introduce measures to improve the insolvency system, which provides the legal options for companies running into major difficulties.

“Our overriding objective is to help UK companies which need to undergo a financial rescue or restructuring process to keep trading.

“These measures will give those firms extra time and space to weather the storm and be ready when the crisis ends, while ensuring that creditors get the best return possible.”

Sharma also announced at the weekend that key workers who are unable to take their annual holiday entitlement because of the coronavirus crisis will be able to carry it over into the next two years.

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