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Government To Introduce Flexible Insolvency Rules To Help Businesses

Business Secretary Alok Sharma has said that there will be new measures to improve the insolvency system to help businesses hit by the coronavirus crisis, while confirming that local authorities are beginning to receive funds which they will distribute as grants to businesses.


Alok Sharma

Mr Sharma announced changes to insolvency rules to allow firms “greater flexibility as they face the current crisis”.

“It is crucial when the crisis passes, as it will, we are ready to bounce back,” he said, as he detailed measures to help businesses “emerge intact the other side of the Covid-19 pandemic”.

“These measures will give those firms extra time and space to weather the storm and be ready when the crisis ends whilst ensuring creditors get the best return possible in the circumstances,” he continued. The new rules will allow companies undergoing restructuring to continue access to supplies and raw materials.

And, he said, there would be a temporary suspension of wrongful trading provisions for company directors to remove the threat of personal liability during the pandemic, which will apply retrospectively from March 1.

“However, to be clear, all of the other checks and balances that help to ensure directors fulfil their duties properly will remain in force.”

Companies required to hold annual general meetings will be be able to do so flexibly in a matter compatible with public health guidance, Mr Sharma said.

“This might include postponing or holding the AGM online, or by phone using only proxy voting,” he said.

Mr Sharma said it was incumbent on businesses permitted to remain open during the shut down “to keep their employees safe”.

Another measure announced was staff being able to defer their annual leave for another two years.


Following several reports in local media over a potential delay to the start date of the new South Scotland Enterprise Agency, South Scotland MSP, Emma Harper, has sought clarity from the Scottish Government and has confirmed that that new agency will be fully operational from April 1st - as was originally planned.

This clarity comes from a Parliamentary question which was lodged by Ms Harper on the 24th of March and answered by the Tourism Cabinet Secretary - Fergus Ewing MSP - on the 26th of March.

In response to Ms Harper, Mr Ewing confirmed that the new agency will be fully operational and will take up its legal responsibility on April 1st .

The agency will work to support businesses the length and breadth of South Scotland from Stranraer and Newton Stewart to Castle Douglas, Dumfries and across to the Borders.


emma harper

Commenting, Ms Harper said:

“Following a number of reports in the local press regarding a potential delay to the launch of the new South Scotland Enterprise Agency on April 1st, I contacted the Scottish Government Tourism Cabinet Secretary directly in a Parliamentary question.

“I am pleased that the Scottish Government confirmed that there will be no delay and that the new agency will take up its full legal and operational responsibilities on April 1st.

The agency will work to support our region’s businesses, to support our economy and to continue to make South Scotland - from Stranraer and Newton Stewart to Castle Douglas and Dumfries - the best place to live, work and thrive.

“Now is a crucial time for the new agency. It will be an invaluable support for businesses who are currently struggling as a result of the disruption caused by Coronavirus (COVID-19) and I look forward to engaging directly with the agency‘s leadership and board members to ensure it is working in the most efficient way to support our region.

“If anyone is looking for any further information, help or support, then please do get in touch with me at any time.”

Fergus Ewing, Cabinet Secretary for the Economy said;

South Scotland Enterprise will take up its legal powers and begin its work with business and communities across the south on 1 April 2020 as planned. Legislation laid before the Scottish Parliament on 20 March effected a technical amendment and administrative adjustment only relating to the transfer of property and liabilities from Scottish Enterprise to South of Scotland Enterprise and doesn’t affect the operational activities of either body. The work of enterprise agencies is even more critical in light of COVID-19 and SOSEA is already preparing to play its part in the economic recovery in the south.”

Covid 19 - Grant Funding

There is some grant funding available: - 


Dumfries & Galloway Council business grant CLICK HERE TO DOWNLOAD APPLICATION [LIVE]

£10,000 grants for small businesses in receipt of the Small Business Bonus Scheme or Rural Relief.  You can also get this grant if you applied for Nursery Relief or Disabled Relief but are eligible for the Small Business Bonus Scheme. 

Grant applications are administered by the local authority.  Scottish Government guidance is that the local authority should reply in 10 days. If you operate in another local authority area, guidance can be found here


Dumfries & Galloway business grant - retail, hospitality, leisure CLICK HERE TO DOWNLOAD APPLICATION [LIVE]

Providing further £25,000 grants to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000.

Full listing of businesses classed as retail, leisure and hospitality here.

Grant applications are administered by the local authority.  Scottish Government guidance is that the local authority should reply in 10 days.

If you operate in another local authority area, guidance can be found here


Third Sector Resilience Fund

The Third Sector Resilience Fund (TSRF) is a £20m emergency fund for charities, community groups, social enterprises and voluntary organisations working in Scotland. The fund will support organisations that already deliver services and products but find themselves in financial difficulties directly as a result of the coronavirus pandemic. The primary intention of the fund is to help third sector organisations to stabilise and manage cash flows over this difficult period.

Further details here. [LIVE]

COVID 19 - Self Employed Support

What help is avaliable to those who are self employed and struggling due to Covid - 19? 

We've put together a series of links to help:


Self-Employment Income Support Scheme

The Self-employment Income Support Scheme (SEISS) will support self-employed individuals (including members of partnerships) whose income has been negatively impacted by COVID-19. The scheme will provide a grant to self-employed individuals or partnerships, worth 80% of their profits up to a cap of £2,500 per month.  Eligibility criteria is set out here

HMRC will use existing information to check potential eligibility and invite applications once the scheme is operational. HMRC will then pay the grant directly to eligible claimants’ bank account. Grants are expected to start to be paid out by beginning of June 2020.


UK Government Self assessment [LIVE]

For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021. 

This is an automatic offer with no applications required. 


UK Government Universal Credit [LIVE]

If you are not eligible for SSP – for example if you are self-employed or earning below the Lower Earnings Limit of £118 per week – and you have COVID-19 or are advised to stay at home, you can now more easily make a claim for Universal Credit. 


Mortgage / rent support [LIVE]

The government has agreed with mortgage lenders that they will offer repayment holidays of 3 months to households in financial difficulty due to COVID-19 and this will also apply to landlords whose tenants are experiencing financial difficulties because of COVID-19. 

To access support, speak to lender directly. 


Loans / credit cards [LIVE]

If you are experiencing difficulties paying back personal loans or credit card bills as a result of COVID-19, you should read the following information:

  • the Financial Conduct Authority (FCA) called on lenders to use flexibility built into their rules to support consumers, taking into account customers’ individual circumstances. Many major lenders have already made statements to this effect
  • if you are experiencing difficulties paying back loans or credit card bills because of COVID-19, you should talk to your lender
  • if you agree a payment holiday with your lender, they should record these in such a way that will not impact on your credit score 

To access support, speak to lender directly.


UK Government COVID-19 Job Retention Scheme

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers. 



To access the scheme you will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required) 

UK Government Statutory Sick Pay - Employer

This refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.  Employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020. Employers will be able to reclaim expenditure for any employee who has claimed SSP(according to the new eligibility criteria) as a result of COVID-19 

To access the scheme:

  • Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note
  • Eligible period for the scheme will commence the day after the regulations on the extension of Statutory Sick Pay to those staying at home comes into force
  • The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible 

UK Government Statutory Sick Pay – Employee [LIVE]

Statutory Sick Pay will be paid from day 1 instead of day 4 for those affected by coronavirus. 

To access the scheme:

  • If you have COVID-19 or are advised to stay at home, you can get an ‘isolation note’ by visiting NHS 111 online, rather than visiting a doctor. For COVID-19 cases this replaces the usual need to provide a ‘fit note’ (sometimes called a ‘sick note’) after 7 days of sickness absence.