Creditors will no longer be allowed to wind up a company that cannot pay its bills due to the coronavirus pandemic, it has been announced.
The news comes after the Government launched a package of new measures designed to “safeguard” the UK high street against “aggressive debt recovery actions” during Covid-19 disruption.
Under the new rules, the government will “temporarily ban the use of statutory demands (made between 01 March 2020 and 30 June 2020)” and “winding up petitions presented from Monday 27 April, through to 30 June, where a company cannot pay its bills due to coronavirus”.
Additionally, landlords will be unable to use Commercial Rent Arrears Recovery (CRAR) unless they are owed at least 90 days of unpaid rent.
The Government has also called on landlords to give tenants the “breathing space needed”.
According to the Business Secretary Alok Sharma, the new measures will ensure struggling companies do not fall into “deeper financial strain”.
“Our unprecedented package of support can help commercial landlords, including through the recent expansion of the Coronavirus Business Interruption Loans Scheme,” he said.
“I know that like all businesses they are under pressure, but I would urge them to show forbearance to their tenants. I am also taking steps to ensure the minority of landlords using aggressive tactics to collect their rents can no longer do so while the COVID-19 emergency continues.”
It is believed that the new rules will be included in the Corporate Insolvency and Governance Bill, introduced to Parliament earlier this month.
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