Covid-19: End of temporary insolvency measures

Released 09 September 2021

The Insolvency Service has confirmed that temporary insolvency restriction protections, brought in to support businesses from insolvency during the pandemic, will be phased out from 1 October 2021.

Companies in financial distress as a result of the pandemic have been protected from creditor action since June last year, through the Corporate Insolvency and Governance Act 2020.

Going forward, new measures will:

protect businesses from creditors insisting on repayment of relatively small debts by temporarily raising the current debt threshold for a winding up petition to £10,000 or more;

require creditors to seek proposals for payment from a debtor business, giving them 21 days for a response before they can proceed with winding up action.

These measures will be in force until 31 March 2022.

Further details can be found at https://www.gov.uk/government/news/end-of-temporary-insolvency-measures.

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