R3 responds to the Budget

03 March 2021

Colin Haig, President of insolvency and restructuring trade body R3 and Head of Restructuring at Azets, responds to the Chancellor’s Budget statement:

“The Chancellor’s decision to extend the furlough scheme, to provide further business grants and a new loans scheme, and to continue the business rates holiday will give welcome certainty for many business owners concerned at their prospects over the coming months. The new Super Deduction measure could also be a huge boost for business investment at a crucial time for the economy.

“However, what was missing from the Chancellor’s Budget was detail about the Government’s role once these measures start to be withdrawn. As a key creditor in most corporate insolvencies, the Government has a direct role to play in supporting viable restructuring and business rescue proposals. HMRC in particular has not always taken a constructive approach to these proposals, and we would like to see this change sooner rather than later.

“By taking a more active and engaged stance as a creditor, the Government could help to save more potentially viable businesses, thereby safeguarding thousands of jobs, securing future tax income, and giving companies a chance to deal with liabilities resulting from the pandemic.

“There’s no denying the Government’s COVID measures have helped businesses in the short term, but as the Chancellor pointed out, these can’t last forever. Directors of struggling companies now have a few months in which to start making plans and taking decisions to secure the future of their businesses.

“We would urge directors and business owners to use this time to seek advice from a qualified source as early as possible, to give them the broadest range of options for resolving the issues their businesses face.”