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Government introduces new measures to protect UK high street shops

Landlords and investors are being asked to work collaboratively with high street businesses unable to pay their rent during the COVID-19 pandemic.

The Government has said they consider some landlords have been putting tenants under undue pressure by using aggressive debt recovery tactics. In order to stop these unfair practices, they are temporarily banning the use of statutory demands (made between 1 March 2020 and 30 June 2020) and winding up petitions presented from Monday 27 April, through to 30 June, where a company cannot pay its bills due to Coronavirus.

The Government is putting in place legislation to provide tenants with more breathing space to pay rent by preventing landlords using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent.

The temporary emergency measures are designed to acknowledge the pressures landlords are facing while encouraging cooperation in the spirit of fair commercial practice. They also come on top of a substantial package of business support measures, including a moratorium on evictions for commercial tenants for at least a three month period.

Under these measures, any winding-up petition that claims that the company is unable to pay its debts must first be reviewed by the court to determine why. The law will not permit petitions to be presented, or winding-up orders made, where the company’s inability to pay is the result of COVID-19.

The new legislation to protect tenants will be in force until 30 June and can be extended in line with the moratorium on commercial lease forfeiture, therefore the Government appear to be planning ahead should this unprecedented situation extend beyond end of June.

For more information on the full range of Government support for businesses, please visit our Coronavirus hub

FEATURING: Dave Wase
Dave joined PKF Francis Clark in October 2018 after a 27 year career working for HMRC. Working as part of the tax advisory investigations team,… read more
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