The government has announced that it will be bringing forward new measures to prevent businesses unable to meet debts due to the impact of Coronavirus from being forced to file for bankruptcy.
Speaking at the daily Downing Street press conference on Saturday, Alok Sharma, the UK Business Secretary, said the move would allow companies to “emerge intact the other side of the COVID-19 pandemic”.
He said the wrongful trading law would be suspended to protect directors during the pandemic. The move will allow directors of companies to pay staff and suppliers even if there are fears the company could become insolvent.
Under the plans, the UK’s Insolvency Framework will add new restructuring tools that mirror the USA’s Chapter 11 procedure, a well-established model adopted by countries around the world. This includes:
- A moratorium for companies giving them breathing space for from creditors enforcing their debts for a period of time whilst they seek a rescue or restructure;
- Protection of their supplies to enable them to continue trading during the moratorium; and;
- A new restructuring plan, binding creditors to that plan
The proposals will also include key safeguards for creditors and suppliers to ensure they are paid, while existing laws against fraudulent trading and the threat of director disqualification will continue to act as an effective deterrent against reckless misuse of these new measures.
The government will also temporarily suspend the wrongful trading provisions to give company directors greater confidence to use their best endeavours to continue to trade during this pandemic emergency, without the threat of personal liability, should the company ultimately fall into insolvency.
The proposals will also include key safeguards for creditors and suppliers to ensure they are paid, while existing laws against fraudulent trading and the threat of director disqualification will continue to act as an effective deterrent against reckless misuse of these new measures.
In addition, while laws against fraudulent trading and director misconduct will continue to provide a deterrent against poor practices, wrongful trading provisions in the Insolvency Act will be temporarily suspended specifically to give confidence to directors to continue trading without the threat of personal liability, should the company ultimately fall into insolvency.
Additional new guidance
Closing certain businesses and venues – compliance
This document provides guidance on the closure of certain businesses and venues as part of further social distancing measures. As of 26 March 2020, new Regulations extending the restrictions are now enforceable by law due to the threat to public health. New information on compliance has been added to the guidance.
Rules on carrying over annual leave to be relaxed
Workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next two leave years. These measures will ensure workers won’t lose their leave entitlements and gives more flexibility to business at a time when it is needed most. Find more information here.
Ease of regulations on hand sanitiser and personal protective equipment
By easing regulations, new suppliers and businesses that produce ingredients for hand sanitiser will be able to bring their products to market in a matter of days. Easements will include asking the Health and Safety Executive (HSE) and Local Authorities to fast-track PPE through the product safety assessment process and allowing products which lack the CE mark onto the market provided products meet essential safety requirements. Find out more here.
Exemptions from devices regulations during the coronavirus (COVID-19) outbreak
Guidance on the fast-track approval of medical devices during COVID-19 outbreak can be found here. In this exceptional situation, MHRA may authorise you to supply a non-CE marked device in the interest of the protection of health.
Intellectual Property Office services
Following the coronavirus outbreak, the Intellectual Property Office have made a number of alterations to their services. This includes alterations to trademarks and designs, patents and interrupted days.
Annual inspection waiver for tank vehicles
Authorisation notice allowing tank vehicles, whose roadworthiness test certificate has been extended, to remain in service on the roads of Great Britain without a valid ADR 1(C) certificate. Click here for more information.
Renting: guidance for landlords, tenants and local authorities
This new guidance provides advice to landlords and tenants on the provisions in the Coronavirus Act 2020, and further advice for landlords, tenants and local authorities more broadly about their rights and responsibilities during the COVID-19 outbreak. Click here.
Business support packages: latest updates
- Extra protection for businesses with ban on evictions for commercial tenants who miss rent payments – click here
- Financial assistance for employers unable to pay statutory redundancy payments – click here
- The Coronavirus Job Retention Scheme – click here.
- Deferring VAT and Income Tax payments – click here.
- Statutory Sick Pay relief package for SMEs – click here
- 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England – click here
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief – click here
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000 – click here
- The Coronavirus Business Interruption Loan Scheme offering loans of up to £5million for SMEs through the British Business Bank – click here. OPEN
- A new lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans – click here. OPEN
- The HMRC Time To Pay Scheme – click here
The government has set up a business support helpline, which is open Monday-Friday, 9am-6pm. More information can be found here. The latest UK Government advice can be found here.
There is a dedicated Government Business Support site here.
Call for business help
Technology challenge to support people who are isolating
£500,000 of funding is available for technology companies who come up with digital support solutions for people who need to stay at home because of coronavirus – click here for more information. Funding of up to £25,000 per company is available. For more information on the programme and how to apply, visit techforce19.uk.
Sector-specific help outside Government
The Government is working closely with Business Representative Organisations and Trade Associations to support the national response to coronavirus, including ensuring messages from Government are heard by all businesses and that business voices are heard by Government. This link lists organisations you can speak with to get advice. Many of these websites also include sector specific guidance and Q&A.
Key and critical worker recruitment
The Department of Work and Pensions now has its own website to enable employers to post vacancies at no cost. Click here.
Offer COVID-19 support from your business
You can use this service to explain how your business might be able to help with the response to Coronavirus. The support needed includes things like:
- medical testing equipment
- medical equipment design
- protective equipment for healthcare workers, such as masks, gowns and sanitiser
- hotel rooms
- transport and logistics, for moving goods or people
- manufacturing equipment
- warehouse or office space, for medical use or storage
- expertise or support on IT, manufacturing, construction, project management, procurement, engineering or communications
- social care or childcare
You’ll be asked some questions about the type of support you can give. You’ll then be contacted as soon as possible if your support is needed.
Government COVID-19 FAQ: What you can and can’t do
The Cabinet Office has produced guidance around the frequently asked questions around the Coronavirus outbreak that businesses might like to share with their employees. Find more information here.