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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.

Wednesday, 3rd June, 2020