The regulations came into force on 26th March 2021 extending various temporary reliefs for distressed businesses until 30 June 2021. This includes:-

  • The current temporary restrictions/additional hurdles for creditors on the service of statutory demands and winding-up peons. If the company establishes that their financial position has worsened for reasons relating to COVID-19 action cannot be taken
  • Suppliers remain prevented from ceasing their supply or asking for additional payments while a company is going through a rescue process. Small suppliers will remain exempt from the obligation to supply such customers until 30 June 2021.
  • Suspension of directors' liability for wrongful trading for directors who can demonstrate that their company's trading has been negatively affected by the pandemic.
  • Restriction on commercial landlords' right of re-entry or forfeiture for non-payment of rent.
  • Restriction on the use of the Commercial Rent Arrears Recovery (CRAR) process by landlords.

It is a difficult balance to achieve between protecting trading businesses individually and achieving a fairness between businesses, and allowing normal commercial trade, such as the need for commercial landlords to be paid. There may be a phased exit from reliefs, but this may form part of a wider review of commercial property leases which sometimes seem to be stuck in the dark ages. A certain reality needs to dawn on landlord and tenant, and businesses need to think now how they intend to survive the recovery which may be hardest part, as the need to buy stock in advance of sales, the new technology and the removal of government support and forbearance gradually disappears. It seems likely that there won't be a hard rush to enforce on government backed loans or deferred tax, but phased collections will flush out many who survived the covid-19 hibernation but cannot survive the exit from it. The end of furlough payments 30 September 2021 is likely to be another crunch point.

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