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.