What will happen after 30 June 2021? 

As the government’s COVID-19 restrictions ease across the UK, the government’s emergency relief measures will begin to do the same. On 23 April 2020, the government announced a suspension of the usual insolvency rules and procedures. After a series of extensions, it is expected that many of these suspensions will end on 30 June 2021.

Such measures were initially introduced to protect individuals and businesses from distressing debt recovery actions during the pandemic. While the initial Coronavirus Act 2020 allowed commercial tenants a three-month rent moratorium, landlords still possessed the power to establish winding-up petitions against the tenant. The measures established on 23 April 2020 therefore went one step further to suspend the issuing of statutory demands where the debt was attributed to coronavirus. Whilst much of the initial publicity surrounding these announcements focused on commercial businesses and ‘saving the high street’, the measures were applied generally to any company in need.

Among those ending on 30 June 2021 is the suspension of statutory demands and winding-up petitions. This means that from July 2021 onwards, creditors are able to use unpaid statutory demands as evidence of an inability to pay back any debt and begin a winding-up petition. A winding up petition can be thought of as a statement of intent from your creditor that expresses shutting down your company as a result of debt. The winding-up petition can only be presented in July 2021 for those who have previously been exempt due to COVID-19. The usually public petitions are currently private matters whilst a judge determines whether the petitioner has the ability to overcome the ‘coronavirus test’.

Research has suggested that, although there have been several extensions in the past, the culmination of such extensions on 30 June and 30 September 2021 are thought to be final.

For those concerned over the ceasing of COVID-19 relief measures, Andy Haldane, Chief Economist at the Bank of England, has reassured many in his statement on 7 May 2021. Whilst he said that the bank ‘does not expect to see a wave of bankruptcies’ upon the easing of COVID-19 measures, he caveated his statement with a confession that there were ‘significant risks’ that ‘[the Bank] will need to track through’.

Despite Haldane’s statement, representatives from several industries have expressed concern over the relief of relief measures. According to the Metro, ‘each week another company closes its doors as the fallout from the coronavirus pandemic continues to have a huge impact on our money’. Michael Kill, Chief Executive of the Night Time Industries Association (NTIA) has said that ‘the government needs to urgently consider potential solutions, such as a shared burned model, and loans to enable longer term debt restructuring’.

Others have termed the suspension of statutory demands and winding-up petitions as ‘delaying the inevitable’ and urged the government to deploy a gradual ceasing of relief. Either way, although another extension may be possible, individuals and businesses need to start preparing for a future without government relief – something that could begin as early as July 2021.

If you simply need bankruptcy advice or an expert in personal insolvency to help stop bankruptcy, contact Asset Solutions today. Our friendly team of specialists have a wealth of industry knowledge and can provide you with assistance throughout all stages of the insolvency process. Get in touch with us today on 0800 689 3861 and begin your journey to getting back on your feet.