COVID-19 Update 31 March – Carrying Over Annual Leave and Changes to Insolvency Laws

Following the updates over the past few days please read our latest update on what we now know.

Rules on carrying over annual leave to be relaxed

To support key industries during COVID-19 the government have decided that workers will now be able to carry over their statutory annual leave entitlement into the next two years if they are unable to take it due to the outbreak.

The regulations will allow up to 4 weeks of leave to carried into the next 2 years, ensuring staff can continue working as part of the national effort against the virus without losing out.

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Proposed Changes to UK insolvency laws

On 28 March Alok Sharma, Secretary of State for Business, Energy and Industrial Strategy announced that the Government will bring into law in “the coming weeks” changes to the UK insolvency laws to support British businesses and give them “greater flexibility” during COVID-19.

The proposed changes will allow firms extra time to get back to normal after the crisis and ensure creditors get the best return possible in the circumstances. Companies undergoing restructuring will also be able to continue accessing supplies and raw materials to carry out their work.

It was also announced there would be a temporary, “three month”, suspension of the wrongful trading provisions to be applied retrospectively from March 1 2020. This will allow company directors to remove the threat of personal liability. However, Mr Sharma did emphasise that all other checks and balances that help to ensure directors fulfil their duties properly will remain in force.

VAT Payment Deferrals

As the deadline for February VAT returns approaches, we decided to look at the most common questions asked surrounding the Chancellors announcement that VAT payments are set to be deferred.

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