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CIGA Temporary Measures Extended – What Does This Mean?
This latest CIGA extension is certainly welcome news for many struggling businesses throughout the UK that have been hit hard due to the pandemic. Whilst we were reading through the mounds of complex information supplied by the government, it soon became apparent that this information really needed simplifying to help businesses quickly understand what this means for them. So that’s what we intend to provide in this blog.

The government have recently extended the regulations introduced by the Corporate Insolvency and Governance Act 2020 (CIGA). These measures are designed to assist UK companies that are struggling due to the pandemic and the impact on their businesses.

Statutory Demands & Winding Up Petitions

CIGA stops winding up petitions from being presented to court through a statutory demand, providing the demand was served between 1st March 2020 and 30th March 2021. This has now been extended to 30th June 2021.

Furthermore, until at least 30th June 2021 no winding up petitions can be presented to the court unless the creditor believes that –

  1. The pandemic has not had an effect on the company
  2. The company’s predicament would have happened irrespective of the pandemic

Petitions can still be presented and granted if the court is satisfied that the company was insolvent before the pandemic started. Clearly these measures have greatly affected the rights of creditors and it is expected that the diminishing patience of creditors may result in them testing the boundaries of the Act.

Wrongful Trading

When company Directors conclude (or should have concluded) that there is no reasonable prospect of the company avoiding an insolvent liquidation, they have a duty to take every step to minimise any potential loss to the company’s creditors. If it appears to the court that the Directors have failed to comply with this duty after the company has become gone into administration or liquidation, the court can order the Director to make contributions to the company’s assets.

This duty was originally suspended on 30th March 2020 and has now been extended until the 30th June 2021. This measure was put in place to protect Directors from the risk of personal liability caused by uncertainty as a result of the pandemic. Directors must however continue to make decisions in the best interests of stakeholders and creditors alike.

Termination Clauses

This regulation prevents suppliers from terminating contracts with companies they supply to that have entered a relevant insolvency procedure. However, small companies who meet at least two of the following criteria, will be able to decline to supply a company entering a relevant insolvency procedure up to 30th June 2021.


  • Turnover of less than £10.1 million
  • Balance sheet below £5.1 million
  • Less than 50 employees

Moratorium Periods

Until 30th September 2021, companies that have been subject to an insolvency procedure during the previous 12 months can apply to enter a moratorium period, a mechanism allowing businesses breathing space from creditors in order to restructure or seek additional cash. This period lasts for 20 days and can be extended for a further 20 days without court or creditor consent, although any additional time will require consent.

From May 2021, Business Intervention Loans and other Government backed schemes will begin to become repayable, and as companies get back to business, Government support could start to diminish. Although lenders are expected to be tolerant, companies must think about how they are going to repay their loans in a credible way.

We hope that this information has been useful in providing a quick overview of this complex change in regulation and what it may mean for businesses throughout the UK. Our teams are experts in property management, so if you do need our professional advice or more information on a particular service, then please get in touch and we’ll be happy to help.

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