Government announces suspension of wrongful trading rules under Insolvency Act

The government has announced a suspension of the wrongful trading rules under the Insolvency Act 1986. Wrongful trading can give rise to individual liability for company directors if it appears that they continue to trade a company when it is effectively insolvent. The suspension is part of a range of measures designed to help struggling companies keep trading during the Covid-19 outbreak. Further details of the implementation are awaited however the changes will apply retrospectively from 1 March 2020.

Other measures aimed at helping companies include allowing applications for a three month extension to file accounts – applications can be made online – and for larger companies holding AGMs remotely.