Eleanor Temple, chair of insolvency and restructuring trade body R3 in Yorkshire and a barrister at Kings Chambers in Leeds, responds to the Government's decision to extend its ban on the use of statutory demands and winding-up petitions:
"This news will provide some welcome breathing space for many struggling firms that are currently trying to make the most of a choppy pre-Christmas trading period. These firms now have an extra three months largely free from the threat of creditor action, which means more time to try and get back on an even keel.
"However, despite the positive impact today's announcement will have, these measures can't be extended indefinitely. The big question for the Government is how these support measures can be withdrawn next year in a way that doesn't lead to a cliff edge for businesses that have weathered an unprecedented year of trading difficulties.
"One key step the Government could take to help manage this process would be to ensure that HMRC takes an engaged - and supportive - approach to its role as a key creditor in most insolvencies. With its new preferential status, HMRC's support as a creditor will be required to ensure that viable restructuring proposals can be agreed - proposals that could potentially save thousands of jobs and businesses as the UK adjusts to a post-COVID environment next year.
"In the meantime and despite this news, we would urge anyone who is concerned about their business's financial future or is spotting signs that it is starting to struggle to seek advice from a qualified professional as early as possible. Doing so will give them more options and more time to make a considered decision about what's best for their business."