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November 8, 2023
The government’s decision to extend its pandemic business support measures is a ‘further and possibly final window’ for COVID-hit businesses to get their finances in order, according to the North East deputy chair of insolvency and restructuring trade body R3.
Chris Ferguson was speaking after Treasury minister Steve Barclay announced in the House of Commons that the planned 30 June deadline for the end of restrictions on key debt enforcement actions were to be moved back.
Issuing winding up petitions and statutory demands for debts related to the pandemic will continue to be banned until 30 September, while commercial evictions will not be allowed until March 2022.
There had been widespread concerns about the scheduled end of restrictions all falling on the same day, which could have sharply increased the financial pressure for many companies.
Creditors would have been able to begin actions to obtain the money that debtor businesses had accrued over the last 15 months, even if the business wasn’t yet able to operate at full capacity, or even at all.
Chris Ferguson, who is head of recovery and insolvency at RMT Accountants & Business Advisors in Gosforth, says: “Many North East firms will appreciate the action the Government has taken, particularly given the delay to the easing of lockdown announced earlier in the week.
“Without this change, many companies could have been holed beneath the waterline if difficult trading conditions meant that there was no way they could repay what they owed in the time available, regardless of whether, with a longer debt repayment timeframe, they could have put a revival plan in place.
“Trading conditions have improved recently, but the Prime Minister’s decision to delay the removal of the final lockdown measures underlines that we’re still in choppy economic waters.
“While the extension of these measures will benefit many regional companies, as time goes on, the Government will need to consider the impact on creditors, who have staff and overheads to pay themselves – balancing these interests is obviously a difficult task for the Government.
“This decision also gives directors and business owners a further – and possibly final – window in which they can plan how they will take their businesses forward when these temporary measures end, as they inevitably one day will.
“We strongly urge any of them with concerns about their businesses’ finances to use this time to seek advice from a qualified professional, and to do so as early as possible, so they can benefit from the broadest range of options available and have a greater time period to decide how they will move forward.”
For any assistance or advice please contact our recovery team.