Details on suspension of wrongful trading provisions
Suspension of wrongful trading provisions
The government suspended the wrongful trading provisions of the Insolvency Act 1986 (“the Act”) for an initial period of three months, retrospectively coming into force from 1 March 2020 and subsequently extended to 30 September 2020. The government has recently reintroduced this suspension from 26 November 2020 to 30 April 2021 and is believed to be a reaction to the second national lockdown and regional, tiered lockdowns to follow from December. This temporary suspension will allow directors breathing space in order to continue to trade and preserve their Company’s positions without the threat of personal ramifications for any decisions they make over this period. Given the current extraordinary event spanning the world over, the government is looking to take steps to alleviate some concern amongst the business community to keep as much continuity in place at a time when we all working in an unchartered territory.
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