CORONAVIRUS: Insolvency Rules and Governance Changes - UPDATE
The Government has published a number of factsheets to explain the changes being introduced. The most significant point is that these clarify that, for a temporary period, small suppliers will be exempt from the requirement to continue to supply a customer which has entered an insolvency or restructuring procedure or obtained a moratorium.
For this purpose, a small supplier is defined as meeting 2 out of:
• Turnover not more than £10.2 million.
• Gross assets on the balance sheet not more than £5.1 million.
• Average number of employees not more than 50.
In its last financial period. Turnover is proportionally adjusted if the period was not a year.
For suppliers in their first financial period, the conditions become:
• Average turnover for each complete month not more than £850,000
• Gross assets on the balance sheet at the date the customer began insolvency procedures not more than £5.1 million.
• Average number of employees not more than 50.