Garages gain additional lifeline as insolvency laws loosened

28 March 2020  

 Garages that are struggling as a result of the Coronavirus pandemic could be supported by temporary changes to the insolvency system.

Announced at the daily Downing Street Coronavirus press conference this evening (Saturday 28 March), the amendments would mean businesses that cannot pay debts as a result of the crisis would not be made to declare bankruptcy.

Explaining the changes, Business Secretary Alok Sharma said that as a result of the changes, company directors whose businesses were being hammered by the crisis would receive some protection: “These measures will give firms extra time and space to weather the storm and be ready when the crisis ends while ensuring creditors get the best return possible in the circumstances.”

The new rules will allow businesses that are forced to restructure to go on acquiring supplies. The changes would also suspend wrongful trading provisions for company directors, for a limited period.

“All of the other checks and balances that help to ensure directors fulfil their duties properly will remain in force,” Alok Sharma added.

The changes will apply retrospectively from 1 March.