Covid-19 insolvency measures lifted as final pandemic support ends

Temporary insolvency measures put in place during the Covid-19 pandemic will be lifted from 31st March 2022 as the remaining pandemic support schemes end.

Temporary measures were introduced as part of the Corporate Insolvency and Governance Act 2020 to limit the impact of Covid-19 related trading restrictions on businesses. Most of the measures introduced have already expired previously in June and September 2021, and the 31st March 2022 will see the final restrictions on creditors ability to wind up companies lifted.

Measures helped to protect firms from being wound up by creditors where businesses had suffered cash-flow problems as a result of reduced pandemic trading, largely affecting the retail and tourism sectors particularly during the height of the pandemic.

Additional measures had also been put in place in the commercial rental sector to protect tenants who were unable to meet rent payments, and a new law has also been announced to resolve outstanding debts between commercial tenants and landlords.

The government support during the pandemic had been welcomed by businesses, with the restructuring practice at Big Four accountancy firm KPMG finding that measures had helped keep the number of businesses folding during the height of lockdown restrictions at a minimum.

From April, the insolvency regime in the UK will return to its pre-pandemic operation; leaders of at-risk businesses should seek professional advice to protect their organisations.